MT WALLETTE, our Francophone retailing correspondent, on council efforts to pass off a pig’s ear as a silk purse (there has to be some trading standards regulations about that…)
The multi-billion-pound takeover of Westfield, the shopping centre developers who have been keeping Croydon waiting for at almost six years for the much-needed redevelopment of the Whitgift Centre, is “extremely positive”, according to council leader Tony Newman.
And he’s quite positive about that.
In what must be the first time that the leader of Croydon Council has felt the need to share their thoughts about an announcement made to the Sydney Stock Exchange, Newman – or one of his minions – cobbled together 156 words to publish on the council website which showed (a) that our council leader doesn’t know much about business; and (b) the council hasn’t got a Scooby-doo what the real ramifications might be of the news that Unibail-Rodamco has acquired the Australian company.
The statement may also betray a heightened sense of nervousness at the Town Hall over the whole Westfield deal for the town centre, which was first announced in 2012.
Newman’s statement demonstrated, yet again, that he, or the council officials who are pulling his strings, consider it more important to put a … ahem… positive spin on developments likely to impact the borough, rather than offer a fair and honest assessment.
Newman, or his ghost-writer’s, ignorance was amply demonstrated in the second word of the statement, when trying to pass off the £18.5billion takeover by the French company as a “merger”.
“This is a much a ‘merger’ as when a great white shark ‘merges’ with a tuna fish by eating it,” one City analyst said when discussing the deal with Inside Croydon today.
In fact, it is the largest real estate deal on record with a European acquirer, and the largest European acquisition of an Asian company ever.
“Even the Lowy family, who have spent 60 years building the Westfield business, are not trying to kid themselves that this is anything other than a takeover. They’ve got top dollar for their shares, and they’re off.”
The management changes at Tory Party donors Westfield could be particularly bad news for Jo Negrini, the council chief executive who has, somewhat pompously some might think, started putting the letters “Hon FRIBA” after her name.
The Australian-born council planning chief was handed the £185,000 per year top job by Newman specifically because of her four years at Newham, working very closely with Westfield’s John Burton on delivering of the mall at Stratford.
Now, though, there is no guarantee that in six months’ time, after Christophe Cuvillier and the Unibail-Rodamco team have moved in on Westfield’s existing operations, that they will have the same sort of working relationship with Negrini. Nor be quite so impressed with her moody Fellowship of the Royal Institute of British Architects.
Undaunted, however, Newman (or Negrini, or whoever it was decided to post this comment on the council website) wrote: “The merger between Westfield and Unibail-Rodamco is extremely positive news for Croydon and will only have a positive impact on the development planned for our borough,” with the remarks attributed to the leader of the Labour-run council.
Yesterday, Westfield distributed a document produced for the takeover announcement which included a mention of Croydon among the business’s on-going projects (we linked to it in our report). You would expect no less with a stockmarket-moving deal of this magnitude. Newman, though, comes over all a bit Del Boy on seeing the bid presentation, and he takes this passing mention of Croydon as placing our suburban town on a par with some of the great destination cities of the world.
“The presentation on the merger given to the international market today features Westfield’s Croydon development as one of the major UK projects for the new group, alongside the extension of Westfield London and the building of new Westfield shopping centres in California and Milan, putting our town alongside some of the best shopping destinations in the world.” Yes, he really has put his name to that.
Newman’s positivity about what the deal means for Croydon puts him out of step with business newspaper the Financial Times and respected academics who study the retail sector.
In today’s FT, they report, “The deal reflects how real estate retail groups are trying to strengthen their position in the face of the mounting threat from online retail and changing consumer habits.
“Traditional bricks-and-mortar operators are having to think up new ways to increase customer footfall and boost sales, with Westfield seen by retail analysts as one of the best in the sector at mixing high street shops with high-end restaurants, bars, cinemas and luxury brands. It has focused its portfolio on larger cities such as London, New York and Los Angeles, rather than outposts in poorer regions,” the pink ‘un reports.
“The retail industry is under severe pressure from internet selling and particularly Amazon,” they quote John Colley, the professor of practice at Warwick business school, as saying.
It is in the FT’s analysis of Unibail’s recent operations which should set off the alarm bells at the council offices.
“The US and UK — where Westfield owns its malls, having spun out its Australian business in 2014 — have been particularly pinched by a retail slowdown. US department store operators such as Macy’s and JC Penney, which once dominated retail malls, have announced plans to close hundreds of stores, and centre owners have come under pressure from activist hedge funds.
“The UK high street has also suffered from retail failures and store closures.
“Unibail’s M Cuvillier is betting that a strategy of ‘concentration, differentiation and innovation’ will insulate the combined group from the troubles facing the wider retail sector… Unibail, too, has been selling offices and weaker retail centres in Europe. On Tuesday, the group said that this reshuffle of its assets would continue with the sale of a further €3bn of assets.”
“Concentration, differentiation and innovation”. From the chief executive of a group which already owns two operating shopping malls in London and which is flogging off its offices and “weaker retail centres in Europe”.
Hey, Tony: you still positive that you’re positive?
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Del Boy Newman’s apparent reaction reminds me of the joke in Only Fools and Horses when Del Boy Trotter is told his medical test results are negative. Assumes this means he is sick when told he does not have the condition. Looks like we have a allegory here.
Meanwhile Hammersons , who have now acquired Intu (Spain) to create Europe’s 2nd largest group after Unibail are planning to build Southern Europe’s biggest mall in Torremolinos, Malaga on the Costa del Sol as part of their strategy to expand in Ireland and Spain. Will this negatively impact on their interest in Croydon?
Messers Newman and Negrini’s response is straight from the Mandy Rice Davis Textbook of Political Reactions: “Well, they would say that, wouldn’t they?” The truth is that no one really knows how the two changes of ownership will play out. Any hopeful response is just hopeful whistling in the wind.