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Westfield finally clinch John Lewis deal for £1.4bn development

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Croydon’s new shopping mall now won’t open until 2023 – more than a decade after the project was first unveiled. M.T. WALLETTE, our retailing correspondent, on today’s long-delayed ‘major milestone’ announcement

An anchor tenant coming to a high street near you… in 2023

Westfield and Hammerson this morning broke a near-six-month silence over their plans for the redevelopment of Croydon town centre to announce that they had, finally, secured the agreement from John Lewis to take space in their £1.4billion supermall scheme.

The operators’ desire to clinch a deal with John Lewis has at times bordered on desperation, and was the worst-kept-secret on the high street.

But the announcement also contained confirmation of a further slippage in the delivery for the Hammersfield centre, which the developers now state won’t be opening until 2023 – a year later than had been suggested when the scheme was granted its revised (second) planning permission this January.

It means that it will be more than a decade since the project was first announced before it is open for business.

The Croydon Partnership, the company set-up by Hammerson and Westfield for their south London joint venture, tweeted, “Delighted to announce this morning that @johnlewisretail and @waitrose will anchor our £1.4bn redevelopment of Croydon retail town centre.“The 165,00 [sic] sq ft four-level John Lewis store will incorporate a Waitrose on the ground floor, representing a significant investment by two of the UK’s leading retail brands in Croydon.”

According to the Property Week website, “The joint development secured by The Croydon Partnership is the first time ever that John Lewis and Waitrose stores have co-existed under one roof.”

The Croydon announcement comes 24 hours after Hammerson revealed that John Lewis had agreed a new lease in the 40-year-old Brent Cross Centre in north London, which is also undergoing a major refit, and doubling in size.

The former site of the Allders department store has long been assumed to be the natural home for a Croydon town centre John Lewis. Allders, for a century the pride of Croydon’s town centre shopping offering, sited on the corner of George Street and the High Street, traded on five floors with 530,000 sq ft of floor space.

What is proposed for the new John Lewis/Waitrose is significantly smaller, at abour one-third of that floor space; it is only just over half the size of John Lewis at Bluewater and one-fifth smaller than their stores at the Westfield supermalls in Stratford and at White City.

Undaunted, the Croydon Partnership hyped on: “The full-line department store and supermarket will be showcase for the two brands, creating the most contemporary shopping experience for customers, bringing the very latest concepts and services to Croydon.”

There’s been slow, even no, progress on the redevelopment of the Whitgift Centre

Today’s announcement sees John Lewis tweak its previous policy announcements that it would not be opening any new stores because of retailing market conditions. Last September, John Lewis’s chief executive, Paula Nickolds, in an extensive interview in the Sunday Times, failed to mention Croydon among the three store openings planned by the company.

The announcement also bucks the trend of gloom around the retail sector, which in recent weeks, as company annual reports have been published, has seen high street chains such as Marks and Spencer, Boots, House of Fraser, Toys ‘R Us and Maplins announce widescale closure plans, or (in the case of the latter two brands) the winding up of their businesses altogether. A net 1,700 chain stores closed their doors in 500 towns and shopping centres last year, according the Local Data Company – the worst figures since 2010.

Until today, Marks and Spencer had been the only anchor tenant announced for the Croydon Westfield.

Inside Croydon reported exclusively last July that the lengthy delays in progressing the redevelopment of the decaying Whitgift Centre (owned by the Whitgift Foundation who brought in Westfield for the redevelopment) and the neighbouring Centrale (owned and managed by Hammerson) had been caused in major part because Westfield had failed to secure any agreement from John Lewis to take space in the development.

There was also blunder last summer, when Steve Yewman, Westfield’s development director, spoke at a networking lunch organised by Crystal Palace football club’s business club and let slip that John Lewis would close their At Home store on the Purley Way and instead open a department store in the Hammersfield supermall.

The near-year-long hiatus between Yewman’s unguarded comment and today’s announcement is indicative of the tough negotiating that has gone on to finalise a deal with John Lewis. Sources suggest that this has revolved around how many rent-free years the department store will be given by the developers.

The boardrooms of Westfield and Hammerson have also both been distracted of late with multi-billion-pound takeover moves. Westfield announced in December that it would be bought by Paris-based Unibail-Rodamco in a £18.5billion deal.

Since when, Hammerson – who operate the Bull Ring centre in Birmingham as well as  Brent Cross – has withdrawn its backing for the company’s takeover of another British mall-owner Intu, and shrugged off a n approach from European shopping centre owner Klépierre.

None of which has helped speed the progress of Croydon’s “regeneration”, with the town centre, and the down-at-heel Whitgift Centre in particular, suffering as a consequence.

Croydon Partners: Westfield’s John Burton, left, with Peter Cole of Hammerson (centre), and a local politician totally out of his depth

There has been mounting concerns over the slow progress, especially among the governors of the Whitgift Foundation, which owns the freehold of the Whitgift Centre, and who depend on its commercial income to help meet the costs of running their alms houses and private schools.

It was the Foundation which invited Westfield to Croydon in 2012, when the Whitgift Centre leasees had already engaged Hammersons to oversee a redevelopment of the site.

Undaunted by the corporate feet-dragging, the Croydon Partnership today pumped out the obligatory quotes from their companies’ big-hitters regarding the John Lewis announcement.

“The decision by these two leading brands to open anchor stores in Croydon highlights the importance of this growing regional catchment and the desire from leading retailers to have a significant presence in the town,” Hammerson’s Peter Cole said, presumably with fingers crossed that House of Fraser won’t be pulling the plug on its Centrale store next month.

And Westfield’s John Burton said, “This is a major milestone…”, not just a “milestone”, then, but a major one, “… and is a demonstration of the strength of Croydon and the development. The presence of John Lewis helps ensure Croydon’s future as the retail and leisure capital for south London.”

And probably means that the long-delayed project will go ahead after all.


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