Westfield goes Broadway

Give shoppers the ol’ razzle dazzle and they’ll keep coming back for more. At least that’s Westfield Corporation’s view.

Dotted across the USA are decaying monuments to old fashioned American consumerism. Known as ‘dead’ or ‘ghost’ shopping malls, they number in their hundreds, with more likely to join them. Some commentators suggest that over the next decade between 15% and 50% of American malls will be closed or repurposed.

Many of the world’s biggest retailers are closing stores. Iconic US department store Macy’s has a plan to close around 100 outlets. Lose these so-called anchor tenants and a vicious downward spiral isn’t far away. Once occupancy levels fall, mall shoppers have fewer and fewer reasons to visit. Eventually, they don’t.

So why would anyone, let alone a cautious, income-driven investor, want to own an American shopping mall?

Because the story of shopping malls is more complicated than it first appears. Not all shopping centres are created equal, as Westfield Corporation’s (ASX:WFD) acquisition of a Broadway production company and hiring of its former owner, Scott Sanders, as ‘creative head of global entertainment’ suggests.

Sanders will be tasked with creating ‘immersive entertainment and experiential creative events’ for Westfield’s flagship properties. In plain English, Sanders role is to develop Westfield malls as venues for entertainment as much as for food and shopping. The move includes the option of renting out centres after-hours to host events and live performances in flagship centres.

Westfield Sydney’s recent ‘Fashion Night Out’ sponsored by Vogue, is an indicator of future trends. In 2015, the event was called ‘bigger than boxing day’ and this years was also a huge success, with AMEX offering shoppers $20 cash back on up to three purchases over $50. According to some retailers sales were booming at the Scentre Group (ASX:SCG) owned Westfield Sydney property.

It will be examples like this that Sanders will have in mind, along with more creative live performances. With the evolution of destination malls like Westfield Sydney City and Westfield Bondi, the company has already proven its worth in turning shopping centres into something far more than merely places to shop. This latest move could cement its position as perhaps one of the most innovative retail property landlords in the world, right at the moment the curtain is closing on so many of its peers.

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