When the Australian property giant, the Westfield Group, opened its shining, £1.7bn retail cathedral in Shepherd's Bush, West London, on 30 October 2008, its timing could not have been worse. Westfield London, spanning 43 acres and offering more than 280 shops, opened its doors in the teeth of the worst recession since the Second World War and just before a series of retailers, including Woolworths, started falling over like a pack of cards late last year.
One year later and the mood music from a number of the centre's retailers appears more positive. While the economy has not emerged from recession, Westfield appears to have done so, reflecting that most of the capital andSouth-East England is showing the rest of the country a clean pair of heels.
But others argue that the performance of Westfield London's retailers is "mixed", that it has failed to live up to expectations and that some chains, including Clinton Cards and the sportswear outlet Puma, are already looking to scale back their presence.
Nevertheless, Michael Gutman, the managing director of Westfield Europe, yesterday struck an upbeat tone about the past 12 months. He said the centre was almost fully let and was on track to attract 23 million visitors inside the first year – 15 per cent more than its target of 20 million.
He added: "It has been in line with expectations. It has been a very solid start in a very difficult environment. We really saw a lot of distress, administrations and bankruptcies at the end of 2008 and in early 2009 but the situation has stabilised." After a slow start, it is thought that a number of the centre's more successful shops have seen a marked pick-up in trade over the past five months.
Michael Sharp, deputy chief executive of Debenhams department stores, said: "We have been very pleased with the performance of the Westfield store and it is bang in line with our expectations. We are getting good footfall into the store. We are definitely seeing quite a few tourists shop in the store."
He added that Westfield had not had any adverse affect on trading at its department store in Oxford Street.
Sir Philip Green, the billionaire tycoon behind the Bhs and Arcadia retail empire, said: "We are pretty happy with Westfield. Topshop and Topman have done very well."
Like many retailers, Mr Gutman admitted he was surprised that tourists accounted for more than 30 per cent of visitors to Westfield London, including a large number of Chinese. "We have been a beneficiary of the whole tourism boom in London, partly from the cheap pound and 'staycations'," he said. The numbers of people using public transport to get there is also ahead of expectations. Guy Grainger, head of UK retail at the property company Jones Lang LaSalle, said: "[The figures are] impressive and unprecedented with any other shopping centre."
Mr Gutman said more than 70 per cent of visitors came to Westfield by bus, Tube or train, justifying the company's investment in nearby stations. However, it is fair to say that Westfield offers only a partial picture of what is happening in the rest of British retailing.
Until the last couple of months, trade at London's shops was well ahead of those in the rest of the UK, buoyed by the influx of tourists, confidence returning to the financial sector and the housing market stirring in the capital before it did in the provinces.
In addition, Mr Grainger said there was "a trend towards shopping in a modern retailing environment with a strong tenant mix, as opposed to some traditional second-tier towns".
There is scepticism that trading at Westfield is quite as rosy as the picture its owner paints. Mr Grainger said the feedback was that the performance of shops at the complex was "mixed", in line with market conditions. But he added: "It is fair to say that the mainstream fashion retailers are pleased with the performance at Westfield London and, despite speculation, I hear the luxury retailers are trading well."
Martin Crossley, a retail partner at the property specialist King Sturge, said: "It is not doing that well. There are a number of units on the market already, with retailers trying to get out. Trading has not been that fantastic and it has not had the impact on the West End and surrounding boroughs that had been expected. Some of the stronger brands that are in there are doing well, but they are doing well everywhere in the country."
Furthermore, industry sources said there was still "discontent" over an increase in the service charges levied on tenants after the mall opened. Mr Crossley said: "The huge row about charges did not do them any favours in their relationships with tenants."
Westfield, however, insisted that it resolved the dispute in June by reducing the service charge by 7 per cent from £13.94 per square foot to £12.98, and giving retailers credits.
Retailers and restaurants are also disappointed that Westfield's cinema, a key driver of footfall, will not open until February after a long delay. But despite these shortcomings, the outlook for the centre as it approaches its first anniversary seems far brighter than it was at this time last year.
Let the Games begin: Centre owner remains bullish about East London site
Just like Great Britain's athletes, the Westfield Group faces a race against the clock to be ready for the London Olympics in 2012. The Australian group plans to open the Games' flagship shopping centre, which spectators will walk through to get to the Olympic stadium in Stratford, east London, in 2011. But so far only three retailers – John Lewis, Waitrose and Marks & Spencer – have signed up to take over one of the 300 units.
Speculation is also mounting that the opening date of June 2011 has already been pushed back to the autumn of that year, but Michael Gutman, managing director of Westfield UK and Europe, said: "We have not set any opening date."
Furthermore, he said Westfield was in advanced talks with a number of "major store users" which typically needed between 20,000 and 50,000 sq ft of floor space. Mr Gutman was also bullish about prospects for Stratford because it is served by several Tube lines, the Docklands Light Railway and a high-speed rail link. "Stratford will be like Westfield London on steroids," he said.