Westfield woe as high street sales fall ‘worst since the crash’

The prospects of Westfield ever making good on their promise to redevelop the town centre appear to be receding by the week, while Croydon’s Labour-run council cravenly gives in to the developers by withholding vital information about the long-delayed project.

In seven years, only the artists’ impressions of the ‘vision’ for Croydon town centre have changed

Westfield, and their partners, Hammerson, announced in February that their £1.4billion scheme to redevelop the ageing Whitgift Centre shopping mall was to be put under “review”, with planned demolition work, due to commence in September, delayed indefinitely.

Six months on, and neither of the two multi-billion international developers have uttered a word publicly about how long their “review” might take, or offered a new date for work to begin. Westfield and Hammerson first announced their plans in 2012, when they said that their wonderful new supermall would be open for business by 2017.

A significant factor in the developers’ pause for thought has been the accelerating decline of high street retailing, making businesses based on charging premium rents to large stores look decreasingly attractive.

Hammerson, in particular, has been struggling to make their business work, as they have been hard hit by large stores, including the likes of House of Fraser and Debenhams – both found in their Centrale mall in Croydon – seeking rent reductions or to pay no rent at all.

And the latest economic reports from the world’s two largest financial information agencies, Reuters and Bloomberg, in the past fortnight suggest that things are not going to get any better any time soon.

According to figures from the CBI – the Confederation of British Industry – in the year to June, retail sales in this country fell at their fastest pace since the financial crisis 10 years ago. Retailers blamed “relatively poor weather”.

Bloomberg reported, “The volume of goods sold slumped by the most since March 2009, with almost 1-in-6 stores saying they sold less than the same time a year ago. Motor traders reported the fastest sales shrinkage in 7½ years, although non-store sales, which include online purchases, bucked the trend to remain broadly flat.”

The CBI’s figures show that high street retailing is getting even tougher – which is very bad news for developers and landlords, such as Westfield and Hammerson

On top of Brexit “uncertainties”, it is the online sales which are hitting the Croydon plans for Hammersfield, with Bloomberg noting that the findings “underscore the woes afflicting the British high street”.

That report was based on figures for the year to June. Today, Reuters has reported on how the high street fared last month, and it really is no better.

“Britain’s high street retailers had a ‘washout’ June…”, see, they’re blaming the weather again, “… as shoppers worried about the Brexit crisis and did not respond to early summer sales discounts,” the news agency reported, citing the monthly High Street Sales Tracker conducted by BDO.

“Sales fell by 0.8 per cent last month compared with June last year, the 16th time in the last 17 months that in-store sales have shown no growth,” Reuters reported, starkly.

“June was another washout month for the high street. We saw retailers discount early on in June, adding further pressure to tight margins, yet they still weren’t able to salvage the month,” said Sophie Michael, the head of retail at BDO.

Michel then added a comment as if she had Croydon’s stalled Hammersfield development in mind. “Retailers are stuck between a rock and a hard place. They want to invest and adapt, but they don’t have the funds or confidence to do so.”

The problem for Croydon is that Westfield and Hammerson’s delays only make a bad situation worse for the town centre’s remaining businesses.

Council leader Tony Newman: if he has plans for Westfield, he has not shared them with all his council colleagues

Many of these have been left in limbo over council-led Compulsory Purchase Orders and they now struggle to attract new custom to an area which has had barely any investment in a decade in anticipation that the Tory-backed Hammersfield scheme might start any time soon.

Blairite council leader Tony Newman recently boasted at a scrutiny committee meeting, when asked about the deteriorating situation in the town centre, that he “has a Plan B, and a Plan C”. He refused, though, to elaborate on what these might be.

Newman has not allayed the concerns of his councillor colleagues about the impact the commercial developers’ delays are having on the Labour administration. “If Tony has got alternative plans, then he has not bothered sharing them with the rest of us in the Labour group,” the councillor told Inside Croydon.

“He doesn’t need to worry about B or C… the only letter Tony needs to consider as far as Westfield is concerned is ‘F’: for failure and no F-ing idea.”

Newman and the council have become increasingly secretive about the progress, or lack of it, with the Westfield scheme.

They have now tried to block a request, made under the Freedom of Information Act, for sight of a letter sent by Westfield to Newman in March, which the council leader claimed, he was promised bright sunny uplands for the whole of Croydon, and which reassured him that the developers were sincere about going ahead with the scheme.

The Westfield letter that Tony Newman doesn’t want you to read. What has he got to hide?

The council claims that the letter is “commercially confidential”, and that Unibail-Rodamco-Westfield, to give the company its latest title, has been in touch with the Town Hall to remind them of this and to withhold their letter, sent to the borough’s most senior public representative.

Not that commercial confidentiality bothered Newman much when, like an over-excited schoolboy, he smeared parts of the letter across social media four months ago, claiming that everything was going to be just fine and dandy. According to Croydon Council, this was not a breach of commercial confidentiality.

“Trouble with this is that if that letter really did have real reassurances in it, then why not publish it all?” a Katharine Street source said today. “A two-page missive from developers is hardly likely to carry any essential business details in it. So it is all beginning to look as if Newman and Westfield really do have something to hide.”


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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
This entry was posted in "Hammersfield", Business, Centrale, Croydon Council, Debenhams, House of Fraser, Jo Negrini, Tony Newman, Whitgift Centre and tagged , , , , , , , , , . Bookmark the permalink.

12 Responses to Westfield woe as high street sales fall ‘worst since the crash’

  1. Blaming Brexit again? As far as I can see most of high street shopping these days is women’s clothing and shoes, do they really stop to think about Brexit when they go shopping for a summer outfit or a new pair of shoes?

    Like

    • How very Thatcherite of you, Kev, to reduce macro-economics to the sales ledger of Mr Roberts’ small town corner shop.

      Businesses like certainty, and they dislike committing tons of cash to projects if they can’t see a definite return. So “Brexit uncertainty”, which Westfield have cited in the past, will see lots more wait-and-sees, or even cancellations, of large-scale investments as Johnson and Hunt compete to send the UK crashing out of the EU.

      And even at the family economics level, people are worried about whether they will have a job next week or next month. Ask the car factory workers in Swindon or Dagenham, or the steelworkers at Scunthorpe, whether they are relaxed about going out to buy, say, a new fridge freezer, or even a pair of shoes.

      That is the background against which Westfield and Hammerson may, or may not, decide to pull the plug on Croydon. And Tony Newman is keeping what information he has on the position from the people he is supposed to represent.

      Like

  2. David Wickens says:

    The situation is mirrored by a much smaller proposal in my home town of Burgess Hill. That proposal is now subject to a revision to increase the number of flats and leisure activities and reduce the retail provision. It’s happening throughout the UK and beyond and Tony should be much more open rather than cling on to a “dead parrot”.

    Like

  3. You do Don Antonio a great disservice! Of course he knows what the plans are and has for a long time. There are 6 plans running from A-F and we have now reached F….which stands for Finished. No Westfield, or not for a long time…..perhaps not until the Mighty Boris has restored economic prosperity to a post-Brexit England ( The UK having dissolved into constituent parts in the interim).

    Like

  4. whitgiftavenue says:

    So, what’s plan ‘B’ ?

    Like

  5. derekthrower says:

    Time for Councillor Newman & Chief Executive Negrini to finally confirm their plan B for the Whitgift redevelopment. The Norwegian Blue Project will consist of Newman thumping a Bald Ego on the desk of the Chief Executive of Unibail-Rodamco-Westfield and shouting “This project is deceased and I want my money back.” The Chief Executive will reply “It isn’t dead Guvnor, it’s a heavy sleeper”. “Look I know a dead project when I see one”. “Don’t you know a Turkey when you see one, they need a lot of rest.” “The species doesn’t enter into it. It’s stone dead”. The problem is the Chief Executive of UBW might shortly be replying is ” So are we !”.

    Liked by 1 person

  6. David Hamilton says:

    I have heard that the revised plans are going to be heavily scaled back. This makes total sense. With the advent of online shopping traditional shopping centres are in all sorts of bother.
    I would hope a mixed use of less shops (though hopefully still M and S and John Lewis), a hotel, flats, offices, maybe leisure facilities, restaurants, even a pub or two could create quite a nice “village”.
    One has to be realistic and this I believe is what Westfield are being. They simply have to create other revenue streams to maintain their business.

    Like

    • >>>
      I have heard that the revised plans are going to be heavily scaled back. This makes total sense. With the advent of online shopping traditional shopping centres are in all sorts of bother.
      <<<

      This is exactly the situation which was known, and warned about, seven years ago when Barwell and Boris Johnson imposed Westfield on to Croydon. But you and other Glee Club cheerleaders dismissed such concerns.

      Your ideas for the town centre would make sense, but beyond a multiplex cinema (another one), Westfield have shown no interest in spending their money on other "leisure facilities".

      Reality bites. But it is the Croydon public, and other businesses, who have suffered as a consequence of developer hubris.

      Liked by 1 person

    • derekthrower says:

      See amongst all this that another notable Croydon business has now crashed after years of struggling on to see the other side of the Developer’s Rainbow. Brasserie Vacherin was apparently closed for a refit, but this refit appears to have turned into closure with the to let signs up now outside. Further their website has been decommissioned.
      brasserievacherincroydon.co.uk/
      So much for all the riches the Developers and their Plans have brought to Croydon.

      Like

  7. Lewis White says:

    News from 2050, post-apocalyptic Britain.
    The de-carbonisation of the world has succeeded, as a chance by-product of the economic catastrophe during the rule of King Boris of Brexit, with glaciers now on the advance in Southern Britain.

    Heavily-bearded Neocroydonia-hipstertaler men, and fur coat-clad women, gather in the setting Sun on the top of the sacred Watertowerhill and watch the sea of ice below them, visibly moving northwards as glaciers from the snow-covered downs of Sanderstead, Purley and all points South

    A massive noise rends the air–the sound of shattering glass, concrete and shearing steel.
    It is the last one of the children of the mythic olden-dayers, whose names are still whispered in secret ceremonies . The Goddess Mini-Manhattan, and her two senior Consorts, Fly-over and Under-pass, and her joint-second husbands, West-field, and Hammerson.

    Very sad, but the irresistible power of the ice has already taken all their sons– Nestles, Apollo, Wittgiff and Leon, and their daughters Luna, Three-penny bit, and Centrale.

    So many! All felled by the glaciers!

    The little band of humans, the last -to-be -added scion of the once great tribe of Croy-don watch in agony. The great structures were almost like brothers and sisters.

    As they watch, the last rays of the dying sun reflect lavender, pink, purple and grey.

    Oh!! the women wail- it is the end of sister Saffron!

    The rays dazzle the onlookers with a series of flashes of white–and black!

    The men groan with realisation……. Brother Boxpark ??? Gone gone gone!

    Adding to the tragic death of sister Ikea, poisoned by the foul breath of the wicked briother Inci-ner-ator. Not to forget the even more tragic extinction of the other branches of the tribe, the Waddonia- Broadgreenia- Norbooria- Forntoneafia- Sarf Croydonia and Uppernorwoodia.

    Which happened at the time of the disappearance over the Southern horizon of the Purleya-Coulsdonia- Sandersteadia- Selsdonia– who one day voted to re-join (as they said “our sisters and brothers the Su-reee-ia Troo-blooia”

    All the group utter the mantra that sum up the loss of the old ways, although the meaning of the words has long been forgotten

    Allders ! Kennards Arcade ! Ta-ber-ner ! Ta-ber-ner!

    And with that, the sun set.

    Like

  8. A reading recommendation: The Ladybird Book of Post-Brexit Britain. It is supposed to be funny but it is really very scary and prescient.

    Like

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