This week marked Westfield Stratford’s first year and while the rest of the country reports doom and gloom, Stratford’s retailers are reporting a great success. Just what is it about Westfield, asks Catherine Neilan?
It’s a year strewn with sporting metaphors and here’s a few more: Westfield strikes Olympic legacy gold. Westfield breaks own record. Westfield chases gold from China.
I think you get the point: headline writers have had a lot of fun with the news this week that the property giant’s second shopping centre in the capital has done just as well if not better than the first.
Both centres have opened in the midst of one of the bleakest downturns in living history – the first during the meltdown at Lehman Brothers, the second shortly after the summer’s riots. Ominous beginnings for what have become two of the country’s most successful retail centres.
Westfield is not, of course, blessed – Bradford has provided more than a headache for the company since it took it on eight years ago, and the fracas over Croydon will similarly be cause to turn to the aspirin.
But the stores that are active are offering respite. According to the director of operations for UK and Europe Bill Giouroukos, Stratford opened with 97% occupancy, and this is expected to grow – Westfield London has for some time been at 100%. This at a time when the national average vacancy for shopping centres is more than 16%.
Westfield tenants give some insight as to what it is that works. Many have reported that within a year, their branch in what was previously something of a wasteland has entered their top five for sales. Some are even predicting that within another year Stratford will be their most successful store in the country.
So what is it that Westfield does right?
Location may be important – Jones’ managing director Andrew White believes his store is “picking up some of the affluent customers from Essex”. But it is also about the excitement created at the centre, with White noting that Lakeside and Bromley are seeing a dropping off in sales as they are increasingly seen as “tired” destinations.
“It has definitely exceeded my expectations and I think it will continue to do really well for us,” he says.
Schuh chief executive Colin Temple tells a similar story. “It got off to an absolutely blinding start,” he says, noting that the Olympics did have a downwards effect, although this was expected.
Having built the centre in a part of the country that needed “a shot in the arm” is one reason Temple puts forward for its success – which he believes will continue for the long term.
Fat Face boss Anthony Thompson says the return on investment has been strong – despite high rents. “Westfield definitely know what they are doing and they are a good landlord,” he says.
Here I believe we get to the nub of the matter – retailers are paying above the odds, but what they receive is the key to their success. Westfield has a team dedicated to continually refreshing the entertainment offered at the centre, having cottoned on to the fact that people “dwell longer” if they are giving more than just shops.
And it is this that high streets, or rival shopping centres, must look to if they are to emulate Westfield’s success.
Gone are the days of the pure “spend spend spend” mentality. As consumers, we all expect to get something a little bit extra for free, and temporary events – whether they be in music, fashion, film – are what attract people to an area, before hopefully being tempted to part with their cash. As a long-term strategy of investment, it’s time that retailers part with theirs.