A jewel in the crown

It flung open its doors amid a flurry of publicity in the latter half of 2004. But as Westfield Bondi Junction gears up to celebrate its second birthday, Tracey McEldowney asks has Australia's second highest grossing mall been able to live up to the hype?

Colloquially it is known as WBJ.
But as anyone who has visited the site would know, Westfield Bondi Junction is anything but colloquial.
Nestled in the heart of one of Australia's most affluent suburbs less than five kilometres from the core of the country's most populated city, the mall is truly a sight to behold.
Comprising 142,000 square metres, the double-pronged, multilevel retail precinct dominates East Sydney's skyline.
It has the developer-speak "panoramic city and ocean views" and is adorned by marble floors, corrosion-protected curtain wall glazing and interior columns made from Portuguese stone.
Risen from the ashes of three existing retail sites - Bondi Junction Plaza, Carousel and Grace Bros - WBJ was, and remains, the Westfield group's most ambitious project.
The jewel of Westfield's 42-strong Australian empire, the Bondi Junction development cost around $680 million to construct but is now conservatively estimated to be worth in excess of $1.22 billion.
Such has been the success of the project, the first of its kind within the Westfield group, it will now be used as a blueprint for similar-type developments in San Francisco and, should the market demand it, the UK as well.
Westfield projects senior marketing manager Skye Fisher said with no other cities in Australia offering the same unusual target mix, WBJ was likely to remain the only premium centre of its kind across Westfield's Australasian operations.
While reluctant to divulge too much about the group's financial performance thus far, Fisher admitted the group had high hopes for the mall's first 18 months.
It has, she said, yet to be disappointed.
"While we don't really discuss financial performance per se, what I can say is that our objective in the first year of trading [to October 2005] was to hit $650 million in sales. What we actually generated was in excess of $750 million, which we thought was a great achievement."
The figures correspond with the findings of Sydney-based trade journal Shopping Centre News, which conducts a much-anticipated and often-controversial annual survey on Australia's top retail eIn its latest Big Guns Survey, released in March, Shopping Centre News named WBJ one of the best performing malls in the country.
The survey, which ranks Australia's 75 biggest retail centres according to financial performance, found WBJ recorded moving annual turnover (MAT) of $754 million in the year to December 2005. This made it the second best performer behind perennial favourite Melbourne's Chadstone Shopping Centre, which recorded $953 million, but put it ahead of third-placed competitor Warringah Mall, which recorded $689.5 million in retail sales over the same period.
While the report found WBJ to be well down the list in terms of physical size - ranking it the country's seventh largest mall behind category leader Victoria's The Knox Shopping Centre - it also found it to be one of the category leaders in terms revenue to space ratio.
The survey, which the magazine has been running for more than a decade, placed WBJ second in the MAT per square metre category - after it was found to generate $7,749 for every metre of space - again behind nemesis Chadstone at $8,221 but ahead of sister site Chatswood Chase at $7,629.
However, while its location, its highly-publicised restaurant precinct - believed to be a first in Australia - and its aesthetics have no doubt done their share to entice punters through the doors, it is its much-lauded fashion quarter that is being credited for the centre's early economic good fortune.
Spread across four (???) floors, clothing, footwear and accessories retailers dominate the centre's list of tenants, accounting for a whopping 40 per cent-plus of the mall's 350-odd occupants.
The quarter is split into two sides, linked by a covered walkway, with renown international brands Versace and Amarni comfortably seated alongside big-name Australian designers Leona Edmiston and Alannah Hill, as well as childrenswear chains Osh Kosh and Pumpkin Patch near what visitors term the "David Jones" side of the mall. The "Myer" side of the mall plays home to chain stores Esprit and Supre alongside smaller independents such as Pink Boutique and Tremlett Jewellery.
To better service its clients' base, the centre management team has introduced a number of initiatives aimed at promoting the group's instore offerings and to keep them coming back.
The first consists of monthly sessions with stylist - and former Instyle, Vogue and Harpers Bazaar fashion editor - Fiona "Fifi" Milne.
For $40 customers are shown everything they need to know about building a wardrobe - using clothing and accessories from WBJ retailers.
Shoppers are also encouraged to email Milne with their measurements, budget and requirements and she then does the hard yards for them, forwarding a selection of options, complete with price points and retailer particulars, in response.
Earlier this year the centre also launched a glossy lifestyle magazine, dubbed WBJ the Magazine, which showcases the designer brands available in the mall.
The moves have meant the mall has seen a significant increase, not just in the numbers of people coming through the door but the frequency of the visits, Fisher said.
"Our target audience are the highest users of services around. They have dog walkers, they utilise dry cleaners, they have house-keepers and gardeners - they've got people to do everything.
"Annually we now have more than 20 million visitors - many of which are obviously repeat customers - walk through the doors. Where a lot of our centres rely on everyday shoppers already there to buy groceries or use the dry cleaning service who then move on to our fashion stores, WBJ shoppers begin with fashion then move through to the other sectors.
"Here, fashion is a real catalyst for getting people through the doors. This then spills on to other categories."
It is utilising this knowledge that Fisher and marketing offsider Sarah Cleggett believe has helped WBJ's get early runs on the board.
"I think this success has come about because we spent many years really researching our target market. We have in our target market Australia's wealthiest trade area with five of the top suburbs in the country falling within this area. For that reason we have a very different customer than other Westfield stores are used to.
"I think it is also the fact that we put the right mix [of stores, services and aesthetics] for this area. It is the mix that we have put on the ground that has got us to where we are," Cleggett said.
For her part, Shopping Centre News editor Sabina Rust credits part of the mall's financial success to the "standout performances" of department store tenants David Jones and Myer.
WBJ's sales figures per square metre are very high compared to others of similar size, she said.
Rust said she would expect a shopping centre with a large number of jewellery tenants, for example, would have much higher figures than a centre housing, again for illustration purposes, furniture stores.
However, WBJ's strong performance in this category suggested the department stores [which occupied a lot of space] within WBJ were strong performers, she said.
"Generally speaking department stores are not trading that well. But WBJ continues to buck the trend. I suspect this is for a number of reasons, including its aesthetics and layout. It's a difficult set up because they go across the street [however] it appears they've looked closely at their demographic and got the mix right."
Fisher said she considered the centre's biggest achievement to be converting a non-shopping centre audience into a group that enjoyed shopping at WBJ. "When we started the project our target market told us that would not come to a shopping centre. They believed we would build a suburban shopping mall similar to the other Westfield malls. I think they have been pleasantly surprised. This is evidenced by the fact 90 per cent of them now come here.
"I think it worked because we opened the most aspiration part of the shopping centre first. That aside, the centre is beautiful and different to anything they would have seen before. I think the biggest conduit for our success in getting through to this group has been word of mouth. They were all talking to each other and they felt left out if they hadn't been to see what all the fuss was about."
But while its forward thinking has earned Westfield a pat on the back from Fisher, Cleggett and Rust, others have not been so generous in their praise.
Within a few months of throwing open its doors, rumours began circulating that angry tenants had accused WBJ management of misleading them about both the amount of foot traffic they could expect through the centre and how much marketing and promotional activity the mall would do on their behalf.
As early as April 2005, specialty fashion retailers were complaining of disappointing sales with one footwear retailer claiming business was "dead" because there was, from his perspective, too much competition from other fashion retailers targeting his market. In fact WBJ itself conceded Friday night visitations were so poor, it elected to scale back the mall's opening hours.
By August there was talk of a mix of up to 30 WBJ retailers banding together to mount a group legal action against the developer for misrepresentation while in October there were reports retailers were being slugged with three-year leases of up to $250,000 per annum supposedly funded from returns of less than $2000 per week.
At the time WBJ management denied the claims, stating that only a small handful of retailers had left the centre. Senior management said they they had made themselves available to talk through any issues with retailers that were having problems however few had chosen to take up this option.
Speaking last week, Fisher admitted complaints came with the territory.
It was up to retailers themselves to ensure they did their homework before signing a lease, she said.
"When we redevelop a centre there is an absolute churn rate. Not everyone will suit the market. When someone is having difficulties we decide to work with them and determine a long-term strategy for them. It happens in every market and not everyone will trade above the benchmark."
Upon reflection of its approach to two years in operation, Fisher said there was little WBJ would look to do differently.
"From our perspective, we can always evolve whether that be in terms of our retail mix, our service offerings or our communications. But what we have delivered so far I think has worked very well."