For Bennie and Rob M.
Westfield London mega-mall has something to prove
Oli Scarff / Getty Images
‘BIT OVERWHELMING’: Shoppers try out the new Westfield London mega-mall. Many observers wonder as to the outcome of the $2.7-billion gamble.
The vast shopping emporium opened as the global economic downturn took hold. Mall executives are upbeat, but British habits and reined-in spending may yet take a toll.
By Henry Chu
December 26, 2008
Reporting from London -- With a map in her hand and a furrow in her brow, Delia Siedle tried to get her bearings. She was in alien territory, unsettled by the noisy throngs around her and the bewildering array of places to go.
Should she head for the Village, a few minutes' walk away? Or wander over to the Southern Terrace? The map gave directions, but no answers.
"I find it all a bit overwhelming, really," Siedle said.
Such was her experience at Westfield London, a gleaming new mega-mall that opened in October in the British capital. Larger than the Glendale Galleria, with twice as many shops and restaurants as the Beverly Center, the mall is urban London's biggest shopping complex.
It is also one of the city's biggest question marks, a cipher not only to Siedle, but to many observers who wonder what the outcome will be for this $2.7-billion gamble.
There was a time that it appeared to be an easy call. Amid the seemingly unstoppable prosperity and gleeful spending of recent years, a massive commercial development in well-heeled west London, with stores like Tiffany & Co. and Louis Vuitton, looked like a safe bet.
But the dice are loaded now with bad economic news. Britain has plunged into a recession, the unemployment rate is the highest in more than a decade, and even some of the most venerable of retailers are going belly up, such as Woolworths.
"Conditions are very tough, and customers are reining in their spending," said Richard Dodd of the British Retail Consortium, adding that about the only sector not facing difficult times is food.
The situation is grim enough that Queen Elizabeth II, in her annual Christmas Day speech, felt moved to address the "feelings of insecurity" among her subjects.
"Christmas is a time for celebration, but this year, it is a more somber occasion for many. Some of those things which could once have been taken for granted suddenly seem less certain," said the queen. One of her own dressmakers recently went bankrupt.
Whether Westfield London will survive under such circumstances or become, as one commentator put it, "a giant monument to the hubris of the nation" is being eagerly watched.
No one, of course, had anticipated such a severe and sudden economic downturn. "Worldwide financial meltdown" and "credit crunch" were not yet figures of everyday speech when the city's new cathedral of consumerism was being planned and built.
The Australia-based Westfield Group, which also owns several malls in the Los Angeles area, including ones in Century City, Culver City, Canoga Park and Sherman Oaks, insists that it is here for the duration. Such huge complexes are long-term investments both for the developer and the department stores that anchor them, which often sign leases for 50 years. Among the big players at Westfield London are Marks & Spencer and Debenhams, two of the best-known and best-loved names in British retail.
But for smaller stores, the typical one-year-free leasing incentive is more meaningful now that Britain is bracing for a recession expected to last through most, if not all, of 2009.
Just how hard the economy would crash was still unclear when the mall opened Oct. 30, to the pop of champagne corks and flashbulbs. London's floppy-haired mayor, Boris Johnson, urged "my fellow consumers" to go forth and spend, confidently asserting that there were people out there "sitting on piles of money."
Besides boutique shops and well-known chain stores, the center boasts high-end names such as Gucci and Montblanc, clustered in an exclusive corner called the Village, and dozens of cafes and restaurants in a food court and along the Southern Terrace. Valet parking costs about $16.
Westfield executives say that they are pleased with the launch, which came in time for the all-important holiday shopping season. At present, 99% of the retail space has been leased, and the mall has averaged about half a million shoppers a week, said Simon Holberton, director of corporate affairs at Westfield's London office.
But many of those visitors have come for the mall's "novelty value," he acknowledged. How long they linger and whether they buy anything is another matter.
"We're working very hard with our retailers on their store promotions," Holberton said. "We're promoting the center ourselves as a premier destination in London to shop and dine and generally hang out, and we're also targeting key tourist markets," such as rich shoppers from the Middle East.
The real test will come in several weeks, after the Christmas rush and the after-Christmas sales.
"We opened at the right time, just before Christmas, and figures are very encouraging," said Tim Campbell Scott, manager of the Fossil store. "But the proof of it will be how we trade from February onwards, once we come out of the sales period. Until then you can't really tell how the mall will be doing."
Beyond the challenge of doing business during economic gloom, the mall is also counting on many Londoners to change their shopping habits.
Always sticklers for tradition, Britons profess themselves loyal to their local "high streets," or main streets. Even in sprawling London, nearly every neighborhood has its own shopping drag, and for those needing one on a grander scale, Oxford Street and Regent Street beckon.
Although mega-malls are not a new concept in this country, they mostly have been built outside major cities, akin to outlet centers in Southern California. Planting one in the middle of an urban landscape is a departure and, some fear, a threat to previously established businesses and more community-minded forms of development.
"It's quite radical for London," said Jenny Miles, 30, a human resources worker who dropped in on the mall for some last-minute Christmas shopping.
She was impressed with its size, variety and shininess, but said, "This isn't my ideal shopping experience, because I quite like the [traditional] high street."
The Westfield Group has tried hard to burnish its credentials as a civic player rather than a retail monster. It spent $270 million on improvements to local transit links, such as renovated subway stations, and is committed to revamping a nearby park.
And in a nod to increasing environmental concerns, carbon-saving measures were incorporated in its design, including a computer-modeled roof that makes the best use of light and heat from the sun.
Once the mall is fully up and running, including a multiplex cinema planned for sometime next year, about 7,000 jobs will have been created.
For now, the company is focused on guiding the mall through its first few months.
But another major gamble lies ahead.
The Westfield Group is building an even bigger project, a mixed-use development with a gigantic mall as well as office and living space, on the other side of town.
The East London project is scheduled to open in 2012 -- just in time for the nearby Olympic Games.
[email protected]
Times staff writer Janet Stobart contributed to this report.
Rog
