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Could Dead Mall Syndrome be coming to a high street here?

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CPO map

The council’s map of the Compulsory Purchase Order area, which will be under scrutiny next month

“Did you have a good Christmas?” is a question that takes on a different meaning for shop-keepers and retail analysts. STEVEN DOWNES on a shopping trend in America of which Croydon’s Hammersfield developers must be wary

Next month will see the opening sessions of what is likely to prove to be the most significant public meetings held in Croydon for a generation.

From February 3, for four days a week, six hours a day, for at least six weeks, hearings will be staged in Fisher’s Folly to examine the merits, or otherwise, of the 141 objections raised to Croydon Council’s Compulsory Purchase Orders for the Whitgift Centre and surrounding property, including the blocking off of an entire public street.

The objectors range from HSBC to Claire’s Accessories, from Rush hairdressers to William Hill. Some explanation of the process, with links to documents, can be found on the council’s website here. The list of the objectors, with links to what they have filed so far (January 13 is the deadline for filing evidence), can be found here.

This inquiry is all being staged, at humungous public expense, so that majority freeholders the Whitgift Foundation and their chosen developers, Westfield, plus junior partners Hammerson, can carve up the centre of Croydon and develop a £1 billion shopping centre.

The CPO inquiry may not go smoothly, and there are some objectors who may prolong the agony. Experts estimate it could be July at the earliest before building work can finally commence, if approval is granted.

But if reports from the United States are anything to go by, then the landowners, property developers, shopping centre managers and their expensively retained lawyers could all be squabbling over something whose time has already passed it by.

At the weekend, The New York Times called malls, “shopping dinosaurs”.

In a business pages article by Nelson Schwartz, the NYT reported that “one-fifth of the nation’s enclosed malls have vacancy rates considered troubling by real estate experts — 10 per cent or greater. Over 3 per cent of malls are considered to be dying — with 40 per cent vacancies or higher. That is up from less than 1 per cent in 2006”.

None of this information has been any part of the unrelentingly gleeful recent Croydon discourse.

“2015 promises to be a great year for our town,” puffs Gavin Barwell, the local Conservative MP, somehow forgetting (again!) to mention that he happens to sit on the board of the property-owning Whitgift Foundation.

Jo Negrini: Croydon’s got its timing right over Hammersfield

According to Jo Negrini, the council’s planning and development chief, “We are lucky to have great partnerships working with us at the council and we are lucky because I think we have got our timing right.”

Australian-born Negrini’s previous local authority job was working on a previous development by the Australian-based Westfield, at the so-far successful Stratford, which opened just before the London Olympics did on an adjoining bit of real estate in 2012. So she should know about good timing.

No one mentions, much, though, how Croydon’s super-mall was originally supposed to be finished by 2017, and that now the earliest it might open, if all goes super-well, is just before the end of this decade.

The CPO inquiry could be critical to meeting that slipping timetable. Complaints from the lawyers of objectors that “no meaningful effort to acquire our client’s interests by agreement” had been made by Negrini’s department at the council won’t play too well at the hearings. And the objection that the CPOs – all paid for, at least initially, with public money – had not been used as the option of “last resort” may not impress the inspector, either.

Never mind, eh? Chin-up. Turn that frown, etcetera and so forth…

This week, a Dorking-based newspaper has faithfully reproduced the propaganda pushed its way by some of its most important advertisers, the Whitgift Centre and Centrale. This claims that 1 million shoppers visited the Whitgift Centre in the 10-day Christmas shopping period and were spending money more freely than at any time in the last four austerity-hit years. This, of course, is all helpful towards the ever-jolly Whitgift Foundation-Westfield-Council narrative, which maintains that there is a crying need for a £1 billion new shopping mall in Croydon.

The evidence in the newspaper to support the footfall figures was paper-thin. But it happened to appear in the same week that Sainsburys, one of the country’s leading supermarket chains, also produced their latest audited trading figures, in which they reported a year-on-year fall in sales of 1.7 per cent in the last 17 weeks. Tesco and Marks and Spencer made even gloomier business announcements. Clearly, Sainsburys, Tesco and M&S must have something terribly wrong, while the Whitgift Centre and Centrale are getting things very right.

Yet even within the up-beat soundbytes from the Whitgift Centre management, there was some acknowledgement that customers’ shopping habits are undergoing a fundamental change.

It was a busy Christmas period at the Whitgift Centre, according to the Whitgift Centre

“We have had over a million visitors over the past 10 days and the comments I am getting from retailers is that the average spend is up on last year,” Andrew Bauer, the Whitgift Centre’s manager, was quoted as saying. Bauer also noted that there had been a massive rise in the number of customers using “click and collect” – online shopping, without leaving the delivery in the hands of City Link.

That change in shopping habits, which has been taking a firmer grip with each passing year of the 21st Century, is a serious threat to making the 20th Century concept of the shopping mall obsolete.

The New York Times article calls it “Dead Mall Syndrome”. There’s even a website devoted to the phenomenon: deadmalls.com. And there’s also a trade association, the International Council of Shopping Centers, who have hired blue-chip PR firm Burson-Marsteller “to put the real story out there and stop the negativity around the idea that the mall isn’t going to exist in the next few years”. How the Hammersfield people must be pleased to hear that.

The spin cannot hide the facts, though. According to the American newspaper report, independent retail analyst figures show that more than two dozen enclosed malls have been closed in the United States in the last four years, adding ominously that “an additional 60 are on the brink”. The paper reports that Westfield is among the operators who have been closing malls in the depressed Mid-West of America, preferring “wealthy urban centres like London and Milan”. Croydon didn’t get a mention…

There may be a reason. The New York Times reports that it is shopping malls at the budget-end of the market which are failing, while in a time of a growing gap between the rich and poor, top-end temples to retail “therapy” continue to thrive.

The New York Times said, “Premature obituaries for the shopping mall have been appearing since the late 1990s, but the reality today is more nuanced, reflecting broader trends remaking the American economy. With income inequality continuing to widen, high-end malls are thriving… as stolid retail chains like Sears, Kmart and JC Penney falter, taking the middle- and working-class malls they anchored with them.”

So, more Waitrose than Lidl then?

“As well as shopping online, everyone goes to real shops. There will always be real shops,” Peter Cole said reassuringly at the recent Develop Croydon conference, which was staged on behalf of the council and which might as well have been called the “Develop Whitgift” conference.

Croydon shoppers eager to experience John Lewis press their noses to the windows before the homeware store on Purley Way opened

But Cole is a big cheese at Hammerson, so you’d expect him to say that, wouldn’t you?

Cole’s comments underlined that Croydon’s new shopping centre will need to be top-end, and how it will need to cope with the online shopping revolution.

“What’s changing is that these shops need to be showcases,” he said. “That’s what we are going to provide in Croydon – flagship shops.”

Haven’t Croydon residents heard that before? The closest Croydon has yet got to having a John Lewis to call its own is the homeware store parked out on the Purley Way. As the “flagship shop” to take up the key site where Allders was once a proud symbol of Croydon, a full-on John Lewis department store could be vital to the Hammersfield plans.

But given the close proximity of Bluewater at Dartford, Westfield’s thriving malls at Shepherds Bush and at Stratford, and the enduring powerhouse of Oxford Street and the West End, will a John Lewis and (yet another) multiplex cinema really be enough to transform Croydon’s fortunes to a “top-end” retail destination?

“We are extremely over-retailed,” was the dire warning offered to the New York Times by Christopher Zahas, an urban planner from Oregon. The paper quoted another planner as suggesting that “society has gotten sick of malls”.

The Dead Mall Syndrome, the NYT tells us, is not restricted to low-rent retail centres. It can also lead to the demise of formerly proud, up-scale developments, which are left with boarded up shops, empty car parks and tumbleweed blowing through the high street.

And wasn’t Croydon once regarded as the up-market shopping destination of south London? What might happen if Hammersfield cannot get their top-end retailers to commit to taking space in their super-mall? What if the projections for retailing in the next five years take yet another hit? And what might happen if the CPO pantomime enjoys an extended run, with stubborn objectors demanding their rights to legal appeal?

Westfield, remember, are ruthless about their bottom-line, and rarely sentimental if they think a scheme won’t work.

Ask the people of Bradford.

Coming to Croydon


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