Retailers revolt as Europe's largest mall struggles
Sunday 08 March 2009
Westfield, the owner of Europe's largest shopping centre, based in west London, is facing a revolt from cash-strapped retailers unhappy with progress at the giant mall, which opened in October.
With a number of restaurants closing, concerns about delays to the opening of a promised 14-screen cinema, footfall worries and increased service charges, a growing number of retailers are looking at ways to extricate themselves from the mall. Many have signed up to rent space at Westfield on very flexible terms that entail smaller than usual exit penalties.
One restaurateur said: "It's news to me that the cinema isn't opening until November. We had been promised earlier. Our operation is doing okay but I know of a number of other restaurants and retailers that are not happy at all."
One retailer said: "It's all been horribly over-hyped. There's quite a lot of bad feeling brewing. The hike in service charges hasn't helped people at all. The whole thing is just badly timed."
Another retailer added: "It just hasn't lived up to expectations for us."
A source close to Westfield said: "We accept that the retail mix isn't perfect – it never is when you first open. We expect there to be some chopping and changing. "But overall, we are happy with progress at Westfield."
However, the source rejected suggestions that some of the tenants had secured six-month break clauses in their contracts when they signed up to the mall.
Westfield claimed 98.9 per cent occupancy at its Shepherd's Bush operation in February, but it declined to say how many units were empty.
Westfield, an Australian-listed firm that owns 119 shopping malls across the globe, reported annual losses last month of more than £1bn as consumers and retailers suffered in the wake of the credit crunch.
The company blamed its dramatic fall in profits on the declining performance of its assets and businesses in Britain and North America.
The Sydney-listed Westfield has a market capitalisation of around A$23bn (£10.5bn). The value of the company has halved in the past year as shoppers have deserted shopping malls.
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