Xviii) Westfield Group


"...subscribe to the school of thought that everything is vulnerable. Even something that has had a long term success, it's only a knife edge away from failure. If you look at it like that you will work really hard to manage each facet of your life, because any one of them could crumble at any moment..."

Steven Lowy as quoted by Jemima Whyte, 2014

"...I know a tonne of kids who have done great at school and have replicated that in life, and I know lots of kids who did poorly at school who have had outstanding lives..."

Steven Lowy as quoted by Jemima Whyte, 2014

"...I find you deal with things in a disciplined manner, one at a time, you can deal with issues that seem insurmountable. They become surmountable. When they break down into compartmental bits..."

Steven Lowy as quoted by Jemima Whyte, 2014

· This firm was started around 60 years ago in a single smallgoods store in Blacktown, New South Wales (Australia) by Frank Lowy. Westfield has used very ambitious, costly restructuring and bold moves as ways to continually re-invent itself and is a global shopping centre empire. Some examples:

- in 1979 Westfield Trust was spun off as a separate property trust investment vehicle from the development arm, Westfield Holdings

- in 2001 the group secured the management rights to Rodamco North America after a hard-fought corporate restructure battle

- in 2004 it rolled together 3 shopping centres and developer entities (Westfield Holdings) and Westfield America to create a $22 billion Westfield group

- in 2006, they took on British developers, Simon and David Ruebens, to secure control of the Stratford City shopping centre near the Olympic Village

- in 2010 they hived off the property assets from the management rights to create Westfield Retail Trust and shopping centre management business, Westfield Group

 · Westfield is worth around US$ 70 billion (2014)

· If you had invested $1,000 in Westfield Development in 1960 at its listing and re-invested all dividends, etc, this investment would have been worth around $170 million in 2010. A similar investment in the All Ordinaries Index, in contrast, would be worth $165,000.

 · Frank Lowy is the richest man in Australia with an estimated of around $7 billion (2013).

. The restructuring of Westfield's property empire in June 2014 has increased the combined market capitalisation (Westfield Corporation & Scentre) by around A $12 b. (October 2015)

- The international strategy is to moves out of mid-market centres and focus on enormous, top-end centres full of luxury retailers in the kind of fit out, restaurants, bars and other offerings that luxury goods consumers might like online shopping is one of the biggest challenges for "bricks and mortar" retailers. To help handle this, retailers use apps and big data to look at factors like how the traffic is, where the available car parks are and helping customers to get free parking at their stores Ford, the automotive giant attempting to transform itself into an "auto and mobility" firm, by opening FordHub in the Westfield World Trade Centre (2016). "...it is a storefront, not a dealership, where consumers can see Ford's latest innovations, talk to "FordGuides" about mobility services and enjoy events..." Robert Harley, 2016 These are not about selling products, they are about capturing people's thoughts to help solve transportation issues of today and tomorrow. Westfield is aiming to connect the physical and digital worlds; not about a choice between them, ie the best centres in great locations combined with a vibrant and totally integrated digital experience. It has launched digital express parking, indoor mapping, advance food ordering, online product search plus a data and analytics unit to work with retailers to better understand and use the data generated from millions of visitors, ie customers will have digital access to premium services and amenities, and interactive directories. Westfield's initial mantra was "growth, growth, growth" with the US portfolio of malls around 61 in 2001. But given the GFC, digital revolution and changes in retailing, Westfield is now focusing on iconic centres in the biggest markets and selling their secondary malls.  Five decades ago Westfield was in the forefront of developing shopping malls linked with cars to the suburbs.  Now its business is moving with its customers to the mass transit and urban core, opening in the best, high traffic locations in cities like London, New York and Los Angeles.

- E-commerce has resulted in fewer customers visiting physical stores. Thus rental returns are under pressure for landlords like Westfield.

"...While people are still shopping at retail stores, the immense growth in e-commerce has meant that major companies are shifting their focus towards online capabilities. The same amount of product is going out to customers, but through different channels. The rise of e-commerce has led to divestment in retail space and an explosion of industrial market land uptake, which could have heavily impacted retail building owners, such as Westfield..."
Travis Erridge as quoted by Matthew Cranston et al, 2017

The pandemic starting in 2020 has encouraged the swing away from physical stores as people like minimising exposure to crowds and social distancing.

Thus, Westfield is aiming to become a retail tech company rather than a real-estate company.


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