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Can Westfield beat the crunch?
David Cohen20 Mar 2009
It was trumpeted as the super-mall that would revolutionise the face of retailing in the capital and smash the monopoly of the West End. When Westfield London opened amid great hype in October last year, some two million shoppers flocked to the £1.7 billion development in Shepherd's Bush in its first three weeks and footfall in Oxford Street initially fell by a dramatic 20 per cent.
In the run-up to Christmas, only Westfield, it seemed, the biggest in-city shopping centre in Europe, had the swagger to resist the "50 per cent off" sale signs that appeared like a rash on every high street across the UK.
Four-and-a-half months later, those bustling, heady days seem a distant memory. Up to half-a-dozen retailers and two restaurants have closed. They include clothing outlets You'th, Kate Kuba, Principles and Blooming Marvellous, and eateries Ito and Esca. Another 20 stores have yet to open, including luxury anchor store Louis Vuitton, whose launch, set for November, was postponed to March, then April and now May. Among retailers, the talk is that Louis Vuitton will not open at all, a rumour denied by the company and Westfield but given fuel by the many retailers whose openings appear "indef-initely postponed".
Visit on a Monday, as I did as one of three visits, and it can feel as if you have the place to yourself. In Next, one of the anchor stores, the changing rooms were deserted. When I headed towards Debenhams, the other anchor, every fifth shop was either closed or "opening soon", with those open invariably offering huge discounts of "up to 70 per cent off".
With nearly 10 per cent of the 280 stores still vacant, parts of Westfield resemble a ghost town, none more so than The Village, the exclusive designer part of the mall, home to the likes of Prada, Gucci and Dior. Here, half of the two-dozen premises are unoccupied or boarded up. You can run for 50 metres and not bump into anyone except for bored sales assistants who stand like mannequins, outnumbering customers by as many as eight to one.
At Amanda Wakeley, the British designer who specialises in silk ball gowns and evening wear, the sales team admit that they have not sold a single item in six days (including, quite incredibly, a Saturday). "The last item we sold was a skirt for £260 last Wednesday," the store assistant says. "We've had customers come in and try stuff on but, unlike our stores in Knightsbridge, which are doing well, people who come to Westfield aren't prepared to spend £2,500 on a dress."
Lee-anne Pritchard, who runs the Oil & Vinegar kiosk, says that after a great December "we're 23 per cent below our target. February was tough, March has been terrible. The problem is that the centre is not as busy as we expected.
"Of course, the credit crunch is having an impact but our stores in Reading and Windsor are doing much better. I blame the landlords. Westfield's advertising has been incredibly poor. And the delayed opening of the 14-screen cinema is a disaster because it means that the centre is dead after 6pm."
Her sentiments are largely echoed by a dozen retailers approached by the Evening Standard over two weeks. After a honeymoon period, the credit crunch is hitting Westfield like an express train, they say, with more shops on the brink of closing.
What has gone wrong? Westfield, whose Australian holding company reported annual losses of £1 billion last month because of the slumping value of its 119 malls worldwide, remains upbeat and insists it is "pleased" with the 9.5 million visitors so far. Simon Holberton, Westfield's director of corporate affairs, says: "Footfall is seasonal and February was negatively impacted by the extreme weather conditions. But Westfield is on track to achieve our estimate of 20 million visitors in our first year, a respectable level for a greenfields location with no retail history.
"Interestingly, the negative impacts on the surrounding road network that were forecast have failed to materialise and vehicular access to the centre's 4,500 'smart' car park is working smoothly."
Indeed, the paucity of visitors on every day other than a Saturday means that parking is never a problem.
The reality that Westfield is reluctant to admit is that unlike Oxford Street, which is buoyed by tourists cashing in on the cheap pound and has seen footfall rebound to 2008 levels, Westfield's footfall has fallen from an initial 660,000 a week to around 400,000, a 40 per cent decline.
Moreover, relationships with tenants have been frayed after Westfield's attempt to impose a 65 per cent hike in service charges. Some retailers - including the 80,000-sq-ft anchor store Next, for whom the rise from the original £8.50 a square foot to £14 means an additional cost of £440,000 - have simply refused to pay. Andrew Varley, group property director at Next, called the charges, the highest at any shopping centre in Britain, "unreasonable". Westfield says the increase is due to large rises in energy prices.
Rumours also abound that the opening of the cinema complex will be delayed beyond this autumn because of problems with its developer, National Amusements, an American company with $1.6 billion of debt. Retailers say a further delay would be disastrous. Westfield would not comment except to say that it "still expects the cinemas to open in the second half of 2009 as forecast".
But nothing epitomises the sense of all quiet on the Westfield front as much as a meander through the empty Village with its piped music, huge chandeliers and elegant pink and white champagne bar. Maureen Hinton, a retail analyst at Verdict Research says: "You have to wonder at the wisdom of this. I don't believe that the true luxury shopper who typically buys in Bond Street will ever be attracted to Westfield. European and American tourists are not going to trek out to Shepherd's Bush, which doesn't exactly have the kudos of Knightsbridge. Westfield was always only going to attract the mass market."
The store manager at leather goods shop Bill Amberg, where a crocodile leather briefcase with Swarovski diamond studs sells for £11,000, agrees. "I've worked in Bond Street so I can make a good comparison," she says. "The footfall in this mall is completely wrong for us. We get a lot of people local to west London shopping in this area, but they are not the sort to spend £1,000 on a dress or a bag.
"Our position is not helped by the fact that of 13 stores on our floor in the Village, just four are trading. When we signed our lease, we were told there was only one more space left in the Village and we grabbed it and had only three weeks to ensure we opened on time.
"And now that we've opened, all around us it's dead. I thought this would be an 'it' shopping centre, but now I think not. February was 25 per cent down on November, but more worrying is what lies ahead. My information is that quite a few shops here are on the brink and drastically cutting back on staff."
Where Westfield has scored is in drawing shoppers away from the high street in west London. A survey by the Evening Standard found that 20 shop premises on or close to Kensington High Street are now vacant or about to close, including WH Smith, their demise accelerated by the local lure of Westfield.
For these shoppers, and for certain retailers, Westfield remains a boon. Mark Constantine, founder of eco-cosmetics store Lush, says that his Westfield store is doing well. "Being three miles from Oxford Street, Westfield is quite far out and reaches a new sort of customer who we weren't seeing before," he says. "I think the problem is that they were over-ambitious. All that stuff about them taking Oxford Street by storm is nonsense."
This weekend, it seems, they are hanging on for Mother's Day. A shop assistant at women's outfitters La Senza wields a red marker as she slashes prices on eye shadow by 50 per cent.
"This centre is dead," she says. "Our Oxford Street and Marble Arch branches are doing much better. When we opened we did well but since Valentine's Day, sales have fallen very badly." She pulls a face. "It's not what they expected when they opened. But what can we do?"
Reader views (18)
As a resident of MacFarlane Road, I am delighted to note that the centre is failing. Never have I encountered such poor external architecture (the planners need shooting and it's no wonder they refused to allow CABE to get involved- it is hideous), such poor community relations, such disregard for the local residents....
I really hope it bankrupts Westfield.
- James, W12, 17/04/2009 15:36
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David grim reeper Cohen... Thank you so much for not only depressing the retailers and killing off any desire your readers may have had to visit the center but also congratulations for writing possibly THE most one sided artical ive ever read. Clearly you have some issue with the center or is it that good news means no news to you?
As a retailer, here in Westfield, in the Village I can safely say we are covering costs, have not cut staffing and are building a strong customer base. The statement only 4 stores are traiding is utter drivel I can count 8 with out leaving my store. Obviously things havent gone the way we had hoped but it is a recession and more to the point if your a good retailer you'll dig deep, sit tight and put your back in to some honest work and amazing customer service instead of expecting Westfield to deliver ready made shoppers. My average spend is four - five hundred pounds with my largest sale being one thousand, five hundred and sixty pounds (last week), Our price points are not that high and we are not Prada or Mui Mui, we just worked incredibly hard. So before you pass such a devistating opinion why not speak to a few more positive retailers or was it the doom and gloom angle you were going for?
- ******, London, 26/03/2009 14:24
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I live near Westfield and go there regularly. I do all my M&S shopping there now rather than Hammersmith (too small) or High Street Kensington. I love the Centre and think it's great. Much better than the cramped and old-fashioned Brent Cross. Things will pick up later in the year I am sure.
- Sally Roberts, Hammersmith, London, United Kingdom, 24/03/2009 16:50
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The problem with Westfield is that there is no uniqueness about it. yes it is nice architecturally, especially the upper floor. But really there is no point in going there, what can you get at westfield that you cant get on Oxford street or even your local high street? The only time I would go there is when it is cold or raining. other than that, I'm a traditional Londoner and am going to stick with Oxford Street.
- James, London, 22/03/2009 22:42
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It is very easy for me to get to Westfields - just a few stops from Lancaster Gate to Shepherds Bush. I have been three times and have bought nothing. I have snacked twice.
Yes, as shopping centres go, it is very pretty but despite all the moans and groans about Oxford Street, I would prefer the fresh air, the vibe on the street and the "feel" of the city in and around Oxford street, any day. Selfridges and John Lewis give me what I want. Liberty's on Regent street for that little bit extra and many, many, many places to snack in around the West End. I just prefer the good old fashioned pavements of central London to the polished marble/plastic of a New Country shopping mall.
So what will they do with the enormous building if it fails completely?
- Dep, Lancaster Gate, 22/03/2009 11:28
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I live near Westfield. It's 90% women's fashion shops. It's not what we need in West London. I need a place where I can buy a new TV when I need one. A new washing machine. Practical shops that are lacking round here. A few interesting one-off shops that you don't find anywhere else. Not just acres and acres of tacky clothing, mostly in black.
The restaurants and cafes are good though and seem to be very busy when I go there. Otherwise the whole place is very dull indeed. Of course, initially lots of people went to see what the fuss was about.
It's a shame to see what is happening to Kensington High Street. It's shutting down. Very sad. But there, also, something need to be done to attract interesting alternatives to the usual high street fayre. There's hardly anything in High St. Ken' that can't be found elsewhere. It's beyond dreary and lacks co-ordination.
- Peter, Olympia, W14, 20/03/2009 18:21
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The truth is, that London is just too over-shopped at the moment. That is, too many shops attracting too few people. It's not rocket science, it's common sense. Sadly, Westfield was conceived in another era, when the party was still at full force. Now everybody's got a BIG hangover and Westfield will have to face the facts: they're going to haemorrhage money for the time being. Good luck to all I say!
- Michael Spencer, Toronto, Canada, 20/03/2009 15:59
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I went there back in November, there seemed to be a of hype and there was a general buzz, but as I shopped around I couldnt help but notice the gloom on all the shops assistance faces, one told me at the time that many shops would be closing pretty soon, and that was in November 08.
So much for the hype.
- Mr Blair, Mauritius, 20/03/2009 15:55
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I went a couple of weeks ago on a Sunday, it was pretty deserted until just after lunch. Also I didnt think it was all that and prob won't go again until Xmas....I agree with some comments here, it was unrequired and the recession isnt the best time to open a new shopping mall.
- Dc, London, 20/03/2009 15:06
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Retailers are in collective denial. They think they can carry on building new stores and the shoppers will just turn up and spend money they don't have. That era is over and they can't get their heads around it.
- Robert C, London UK, 20/03/2009 14:20
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Bottom line is that Westfield is too expensive.
Who can shop there?
- Meho Emsic, london,uk, 20/03/2009 14:10
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The Westfield centre I went to in west Los Angeles was pretty empty too, but it seems to be surviving.
- Merrie, London, 20/03/2009 14:03
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Doesn't help that the BBC is selling Television Centre, with the reduction of staff alongside Wood Lane.
- William, Haywards Heath UK, 20/03/2009 13:56
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I know someone who worked on this mall before opening and it was common knowledge that some stores will not be in place until this year. The cinema may bring in people into the centre and they will spend some money in the stores and restaurants just like they do in places like Bluewater. Its a nice shopping centre that offers something different to the crowds, mess and noise of Oxford Street.
- Anne, London, 20/03/2009 13:36
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This type of enclosed 'mega-mall' which effectively cuts itself off from the surrounding streets is well past its sell by date. My home city of Liverpool went for a different approach, integrating the new stores, hotels, restaurants etc (all 42 acres of them) into the existing street pattern and it is a huge success.
Having said that, Westfield will do just fine in the long term though I doubt it will ever perform as a viable alternative to either the West End or Knightsbridge, more like a large scale version of Wood Greens Shopping City. Sadly it will seriously damage Kensington High Street which is currently a much more attractive place to shop than any mall.
- David, London, 20/03/2009 13:23
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And, believe it or not, Brent Cross has a current planning permission to double the shopping area!
- Jay, London, 20/03/2009 12:27
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Said all this on these pages months ago, no listened then. Louis Vitton were never going to open in November. They didn't even have a design in place by the end of October.
Westfield wont fail because of the recession...it will fail (as its concept) because it was not necessary in the first place.
The high-end boutiques were especially misguided in going there. I know of one that will be closing a branch, elsewhere in London, to keep the Westfield shop open just to save face, even though the Westfield branch makes less money. The closing branch has been a consistent performer, even if sales have been down of late. Fortunately no-one will lose a job over it.
People that want to spend £1000k plus on an item of clothing, jewellery or an accessory will go to Bond, Sloane, Covent Garden or Knightsbridge, even if it means going by Shepherds Bush on the Central Line. The Village will soon enough just become a suburb of the Clone Town that the rest of the centre was always going to be.
Move on, nothing new here.
- Escobar A-Lop-Lop, Camden County, 20/03/2009 12:16
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Perhaps the lack of tourists is due to the fact that Westfield won't have made it into the London guidebooks yet. I doubt that tourists aren't visiting because it is in Shepherd's Bush (tourists go all over the place - it's Londoners who tend to discriminate on the basis of postcodes) - they probably just don't know it's there. Generally, though, this is a bad time for shops, and they'll just have to wait it out like everyone else. (And if WH Smith's Kensington "demise" is being blamed on Westfield, it's their own fault as they have a huge shop at Westfield!)
- Freya, London, 20/03/2009 11:57
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