In Australia the name " Westfield " probably illustrates the opportunities that await those who migrate to this country and apply initiative and hard work to create an empire. Almost fifty-seven years ago Frank Lowy and business partner John Saunders built the Westfield Shopping centre complex from scratch. With shrewd foresight it expanded to the US, New Zealand and Britain.
This week, now Sir Frank Lowy is urging his shareholders to accept an offer from one of the worlds biggest property companies to purchase Westfield for $ 32.8 billion dollars. We are on the cusp of a great change in our shopping habits and Lowy accepts the need to pass the baton to the European firm of Uniball-Rodamco who will have the task of making Westfield adapt to how shopping will evolve in the future.
The bricks and mortar shopping world is under threat from Internet shopping and this has cut a swathe through many smaller strip malls and older main street shopping centres. The Westfield portfolio have held up well but it is evident that change is about to occur and the future will see these centres evolve with a wider range of activities The impetus will concentrate on entertainment and cater for theatres and restaurants, sports - and to a lesser degree - shopping.
This is an exciting - and dangerous - time for the people owning the world shopping centres. Big players are moving into the supply field and public tastes are changing. The winners will be those who accurately predict what will emerge and configure what they are offering to meet that need.
A big part of the present shopping centre scene involves " franchise " operations where independent owners offer merchandise under the brand name of a famous entity. It is fast becoming apparent that many of these are not viable and some are being forced to close their doors at great financial loss. It is claimed that these franchise conditions are often onerous and force the payment of sub standard wages to even reach a break even stage of operation. In many cases, such franchises have been the only chance for independent operators to establish their own business.
It seems quite possible that the future may not favour clusters of smaller shops surrounding an anchor tenant and franchise operations may sharply decrease. This change of Westfield ownership comes with a warning that major change is about to happen. Small business owners will await that outcome with trepidation !
Frank Lowy had the insight to correctly gauge the right time to create his shopping empire. He is one of the few with the good business sense to know when it is the right time to walk away !
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