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‘Ripple effect’ hits cafes, bars and clothing shops in Canary Wharf
Rashid Razaq and Kiran Randhawa19.11.08
SMALL businesses in the heart of the City today revealed how they are on the verge of collapse.
Firms close to Canary Wharf, are falling victim to the so-called "ripple effect" of the global economic downturn.
Due to almost total reliance on the financial sector, scores of businesses at West India Quay have closed or are under threat.
More than 5,550 banking employees have been made redundant in the area, home to HSBC, Morgan Stanley, Credit Suisse, Bank of America and the failed Lehman Brothers and that is set to further diminish as Citigroup's 12,000 UK staff face the prospect of cuts.
Canary Wharf's first big knock-on casualty was Ubon, sister restaurant of Nobu. Although officially closed in September for relocation, an industry source said the owners could no longer justify the "very expensive rent".
THE CAFE
The owner of the Beluga Café in West India Quay was forced to close down in September after he missed a payment on the loan used to buy it.
Richard Clark, who bought the cafe two years ago, said: "I saw two awful summers but the last couple of months were particularly bad."
THE RESTAURANT
Via Fossa has halved its staff in the past six months and had to resort to promotions to attract business. Manager Ceejay Mlambo, who has worked at West India Quay for five years, said: "It's the worst I've ever seen it. Customers numbers are down more than half on Thursdays and Fridays. Takings are down around 35 per cent already. We were getting party bookings for 40 to 60 people, sometimes 100, now it's more like 10 or 20 and they tend to be leaving parties."
THE BAR
A slump in profits at champagne bar Dion triggered its closure in September. The venue was opened a year ago. Owner Jo Chalker said: "When we opened we didn't see the credit crunch coming. I took the decision to close it to concentrate on my other two bars. There were two weeks in September that were particularly bad for business when Lehman Brothers collapsed. They had booked a lot of parties with us, so them going was a huge loss of business."
THE CLOTHING STORE
Men's suit shop Mark Marengo saw profits plummet at its
West India Quay branch after the Lehmans collapse. Manager Tony Eachus said: "Things have been really tough. With Lehman Brothers going, we lost a lot of clients." The store, which sells suits up to £800, also has branches in Fulham and on Savile Row. Mr Eachus added: "We have definitely noticed a downturn in trade and as we are at the higher end of the retail business, we are feeling it more than others."
THE HAIR SALON
The Gentry in West India Quay has extended its opening by an hour and half to 8.30pm after losing customers during the day. Partner Keely Klein said: "We used to get people in here during work hours but everyone in the City is so scared of losing their jobs they are not leaving the office. We get most of our customers during the evening now so we are thinking of staying open even longer."
THE NEWSAGENT
Ravi Rajan, owner of Hot News, said his customers are spending less. "Wine, cigars and cigarette sales have gone right down," he said. "I'm not ordering as much stock as I was a few months ago. My accountant is looking at my paper work this week. I'm worried about the business but what can I do?"
Reader views (8)
Whilst I don't like to see any business go under, I do agree with the others that these bars are (or were) way over priced and, like some of those who work (or worked) in Canary Wharf, have been far too greedy for far too long (£4 a pint of the black stuff and £9 a double spirit!!? - I'm sorry, but their rent isn't that expensive). I wonder whether you'd get the same dire feedback from Weatherspoons? Maybe that's where all the punters are going?! I'm not saying all bars should be like Weatherspoons, far from it, but what West India quay needs is a funky bar with good food and service but without the rather expensive aftertaste....
- David, Canary Wharf
The rent for these properties is probably excessive that is one of the reasons prices have to be high. Landlords can't always lower their rents as they might be responsible to the banks. At one end of the chain there is the trader and usually at the other end is a bank. The banks always win because they can force a fire sale and more often than not get out with what they put in.
- Jim, Auckland, New Zealand.
Soon Michael heseltine will be called in to sort out London Docklands all over again
- Keith Price, Luton, England
There isn't a single bar in the country that isn't facing financial struggles. The smoking ban and credit crunch have affected all UK licensed businesses, but at West India Quay they've also had to put up with months of disruption from the DLR project, and a load of unsightly roadworks in the area. Dion never worked, and Beluga was starting to look like a car boot sale for 80's garden furniture. I walk through West India Quay past Marengo's all times of the day, and the only person I've ever see in there over the last six years has been a lonely man that looks like he's dreaming of the day he'll sell a tie! I'm glad Beluga and Dion are gone, it's about time some decent businesses got the opportunity to perform in the one area in the country with some real potential.
- John Ricard, London, UK
My sympathy is low for these businesses. They have overcharged Canary Wharf workers for years and generally had poor levels of service and offered low quality food. A good recession is exactly what is required to improve the quality of the offerings in London and indeed the whole country. Go to any other big European City and you can really see what poor value and quality London offers for food and drink.
- Matt Harris, London
Good, all these places were way too expensive from the outset.
I hope they all go under.
- Eddie, London
""scores of businesses at West India Quay have closed or are under threat" - The businesses you have listed are the ONLY businesses at West India which has always been a bit of a white elephant. Dion was the most overpriced bar in the City, Beluga needed a pricey refit and Marengo never advertised. Considering that Canary Wharf has 150k people 5 thousand is hardly cause for concern. KPMG and State Street and Morgan Stanley are opening soon.
- Big Andy, London
There are about 15 businesses on West India Quay. How can "scores" of them have closed or be under threat?
Also, the picture is of Dion, not Beluga Cafe as stated in the caption.
- P. Edant, London, UK
