Bill Giouroukos is already looking beyond Westfield’s Olympic adventure in Stratford.
It’s impossible to avoid the Olympics this summer, and with the world’s eyes trained on east London, Westfield Stratford is fully in the spotlight.
The jury is out on whether trade will increase as a result – early indications suggest the opposite is true.
Speaking before the Games, Westfield’s director of UK and Europe operations Bill Giouroukos struck a cautious note, saying there was “a lot of complex issues” to take into account, not least the degree to which normal shoppers might be put off by the hordes of Olympic tourists. And at the Games’ mid-point, Locog revealed the Stratford shopping centre would be closed to those without Olympic tickets, igniting anger from some tenants.
Naturally, Westfield has always been planning for the longer, more lucrative game and Giouroukos says London’s host status was “a little bonus” that came after the decision to take the Stratford site was made.
“The fundamentals were there before the Olympics decision was announced,” he says. “The show will only be in town for a few weeks, but meanwhile the strength of the centre has been building, and we believe it will continue to do so. We are very bullish about it.
“East London was not very well catered for, so we thought there was a great opportunity here – and the regentrification of the area, the wider investment, and the transport infrastructure were all important elements of that.”
So far the figures bear this optimism out: Westfield Stratford has seen £500m worth of sales in its first eight months, attracting an average 800,000 visitors a week. The group is now looking forward to £2bn in sales across both Stratford and its other site in the capital, Westfield London in Shepherd’s Bush, attracting a total of 60 million visitors in time for 2013’s full-year results.
But not everyone has been so impressed. According to one Westfield London tenant, Stratford’s “demographic was not as desirable”.
Others who have taken space have found that parts of the centre – notably the outdoor areas – are struggling to attract footfall. There has been talk of what will happen once the large number of pop-ups taking retail units – including Liberty and H&M Sport – leave after the buzz around the Games has died down. And, of course, the Olympics itself has had an impact, with the car park being shut several weeks ahead of the event, putting off the more affluent (non-public transport using) shopper.
Giouroukos is quick to defend all these charges – although he does acknowledge that the car park was “a challenge”. In particular, he highlights Stratford’s impressive opening occupancy rate – 97% – although he declines to give the current rate outside of the group’s annual results.
Regarding pop-ups, he says discussions are taking place with some current retailers, but admits that “others” will leave after their allotted time. He also offers up the names of recent retailers and brands to join the Stratford family – from Victoria’s Secret to Twenty8Twelve – but shies away from naming the many who are lined up to join in the next six months.
“I don’t think we will see a drop in occupancy. Some pop-ups will leave, but some new names will arrive – that is the exciting thing about retail,” he says. “The product offer will continue to strengthen and evolve through new shops.”
In a bid to improve footfall, canopies have been erected in the external areas of Stratford – although they have been removed for the duration of the Games – and changes to lighting and floor finishes are also expected to encourage shoppers into less busy areas.
“A cocktail of all of these ingredients helps to make it stronger – even at Westfield London it took a bit of time to get right,” says Giouroukos.
Having two major shopping centres in one city is no small challenge, but recently Westfield unveiled plans for a third centre within the M25 at a site in Croydon. Despite the concentration around the capital, Giouroukos insists there is demand for yet another mega mall.
Firstly, the team conducts “extensive research” before committing to any site, but secondly, and just as crucial, is the work that goes into tailoring each centre to the local demographic, which means “no two Westfields in the world are alike”.
“We are investing in excess of £1.5bn for each asset – believe me, we take those investment decisions very seriously,” says Giouroukos.
“Westfield London has The Village – the only luxury component of its kind in a centre in the UK – and our research showed we could do that there. Fashion is a very important component in Stratford as well, particularly youth fashion. It’s a different emphasis – you have to cater to those markets.”
Beyond underlining the importance of local differences, Giouroukos remains tight-lipped about what plans he has for Croydon – and equally offers limited detail on plans for the beleaguered Bradford project, the shopping centre that Westfield took on in 2004 and only last month confirmed its anchor tenants Marks & Spencer and Debenhams.
However, he is confident the company is not overextending itself in the UK or globally, with projects also ongoing in Milan and New York’s new World Trade Center. Westfield is already looking to identify more locations, “not just in London and the UK, but in Europe and other markets”, he says.
Emphasising the success of the existing sites, planning permission has just been granted to extend Westfield London by 500,000 sq ft and 1,500 units. Although Giouroukos declines to name any potential new partners for the extension, the team is “in discussions with a lot of retailers who are vying for space – there is high demand”.
Within current space, the Westfield team is always looking at what new retailers or features can be introduced. One idea under discussion is the introduction of a fashion equivalent of Stratford’s Great Eastern Market – a range of small units, some indies, some large businesses, to bring a “specialist” feel to the centre. Giouroukos also solicits concepts more generally.
“We’d like to engage with anybody who has a good idea,” he says. “In Sydney we have a concept in our youth precinct for young designers, whereby someone has taken out the master lease and the designers come in and out without being tied up with the capital requirements of taking a shop. They get given a go and the consumers see something different from one week to another. I could see potential in something like that for one of our centres here.”
Another way of adding character to the centre is bringing more independents into the mix, he says. “Indies shouldn’t be frightened of talking to us because they see us as a big multinational organisation. If you have a properly thought out plan, get in touch with our leasing department and, if it’s got merit, it could bubble up to the top.”
Bill Giouroukos on…
The UK’s fashion retail ecology “No particular category stands out – retailers within categories all perform at different levels. You often hear that luxury is more protected in the recession, but it’s not performing all at the same level. Conversely in value, which is supposed to be more exposed, you have the likes of Primark doing very well. That is why we have to ensure the offer on the ground has breadth. If we were just a luxury mall, it would be a risk, likewise if we were just value.”
UK exportability “British retailers who have done business with us here have a level of confidence in what we can do. Some will come with us when we launch internationally. British fashion retailers are very sophisticated and that means they are very exportable, because they can compete with the best.”
The changes recession brings “You always have changes coming out of a recession – the market shakes out and retailers have to adapt. Every time it’s different. I’ve seen category killers or the “small and nimble” mentality win out, or “be different and you’ll succeed”. It’s hard to tell where it will go this time. The only thing I can say is that change will continue and we will adapt to be relevant to the customer to survive.”