Retail tycoon: Theo Onisforou
Mention property developers and the word ‘sentimental’ doesn’t spring to mind.
However, it’s a word Sydney property developer Theo Onisforou uses to describe himself as we enjoy a coffee on a warm Spring morning at Jackie’s Café at The Intersection in Sydney’s historic Paddington.
His self-confessed sentimentality gives you an indication of how the independently owned – and thriving – retail strip, The Intersection, at the corner Glenmore Road and Oxford Street, came to life.
Stemming from Cypriot migrant parents, Onisforou grew up in Paddington.
It was a very different Paddington from the elegant suburb known today. In the late 1950’s and early 1960’s his childhood suburb, Paddington was considered a slum. His parents owned a fruit and vegetable shop in Sydney’s Randwick where he also worked.
It was back in the days when people shopped locally and the grocer knew your name.
Fifteen years ago he slowly began acquiring his own village at The Intersection, acquiring one shop at a time.
His dream was to fill it with independent, Australian fashion labels and it has come to fruition. His first tenant was Scanlan & Theodore and the rest soon followed.
You have had a very diverse career as a Chief Investment Manager to Kerry Packer, as well as owning an Angus cattle stud, a property developer, but you also have a strong background in fashion. Tell me about how you got into fashion with the late Mark Keighery, founder of Marcs.
When I met Mark he was typical fashion: great style, great taste, no business acumen and no money, so we were a perfect fit. It was a 50/50 partnership with Mark with the Diesel license, which was predominately a wholesale business. We also opened a shop on Oxford Street which was going for about eight years when we sold the business.
Tell me about how The Intersection came about and your acquisition of the premises?
It wasn’t in one hit; it was grown gradually and it was an aspiration of mine. Every international city has a precinct where their local fashion designers are located and I always thought Oxford Street wasn’t a true representation of Australian fashion. Before Westfield Bondi, I always felt Oxford Street was a Westfield without a roof. You had all of the homogeneous fashion labels there and I felt it was an opportunity to have a precinct that housed exclusively Australian fashion designers. The Intersection, in real estate terms, was the worst part of a good street; the then best part of the street was up towards Paddington Markets and this was an undesirable part of the street and it gave me an opportunity to buy inexpensively.
What inspired you to target Australian fashion designers?
Effectively because of my friendship with Mark, I met a lot of fashion people and I knew a lot of them. My first tenant was Scanlan & Theodore. I met them through my financial and personal friendship with Mark. It was relatively easy to develop friendships as I was calling upon people I already knew in the industry.
You have fought hard to make it a bustling strip, while the top half of Oxford Street has struggled and so has the bottom half. How have you managed to keep The Intersection thriving?
The other end of the street has a problem: each store is owned by an individual owner. The reality is the only way to do what I am doing is to have a large number of stores and to treat is as a precinct, and I was lucky enough to secure a large number of properties to enable a consistent strategy. Many times in the last 15 years I have had the opportunity to lease stores for more rent to overseas operators but I have resisted the obvious temptation. If I only owned one store I wouldn’t care who took the store, I would only want my rent. But in my case I have had to take a holistic view.
Why has The Intersection survived so well?
The great threat to Australian fashion retail is the homogeneous chain stores trying to sell a $100 disposable garment. They want everyone around the world to buy the same garment at that price point. From my point of view, I am repulsed by homogenous fashion, but it’s a reality you can’t stop and it’s here. The main reason why we are here [at The Intersection] is that we aren’t competing with H & M and the Zara’s. The average price point here is about $400. The bad news is a large number of Australian fashion designers are competing at the low end and I empathise and sympathise with them. As a result, the number of fashion retailers has had to contract as a consequence of the overseas invasion. It is a great shame. The greatest shame, however, is that the Australian Government doesn’t understand the importance of the Australian fashion industry from the point of view as an employer of people. Only when the government realises this and gives some assistance will they have an opportunity to properly compete. The fashion retailers are effectively fighting with one hand tied behind their back. This also addresses the Internet retail aspect of it.
What would you like to see happen?
Generally, people are happy to buy a cheap piece of clothing over the Internet, but I am not sure they want to purchase a $400 piece of clothing over the net. There seems to be a lack of comprehension by people that shopping is a lifestyle activity. If you look at data from the Tourism Taskforce, 90% of all tourists want to shop. They nominate this as something they want to do in the city they are in. From my point of view Westfield London, Westfield America all looks the same to me – like Westfield Australia. So the government needs to understand Westfield is not the answer to the desire to shop. The precincts like King Street, Newton and Oxford Street need to be supported and assisted. I have attempted to approach a tourism minister many times and say: “You really need to be helping Paddington as we are a tourist attraction” and I haven’t succeeded as they just don’t get it. There needs to be a recognition we are an important industry and a large employer, and there is an investment to be made in Australian fashion that will reap substantial financial rewards. We need to recognise it’s a substantial tourist attraction. We need to understand you don’t go to Australia just to buy Louis Vuitton.
The Intersection established The Walk of Style honouring past and present Australian fashion designers, tell me how that came about?
From my point of view it’s simply recognition of Australian fashion and it’s importance. I am a sentimental sort of a guy and I can nominate the retailers who were big when I was younger. One that comes to mind is Stuart Membery, who hasn’t yet been recognised but who’s to say in the future he won’t be? If you have been successful in Australian fashion you are a rare commodity. There hasn’t been enough recognition of who has been successful in Australian fashion. It was really the death of Mark that caused me to think about it. Australian fashion has a past, a present and a future, and ultimately you need to recognise the past as part of the direction you are going to take for the future. It’s a way to say we recognise them. It’s not an original concept, we aren’t reinventing the wheel, it’s just a way of saying there are a number of people that should be recognised and are recognised.
We also have the ‘who’s who’ of Australian fashion, which is a broader brush and gives some people a broader recognition. I have had great fun with people, who are in the ‘who’s who’ and have taken them around and shown them and I have enjoyed their reaction to seeing their name on a plaque. It was fun and great to see the joy it gave them. I like to think those plaques will survive me and their importance will increase with time. We are announcing three more reciprocants at our next Walk of Style function on 28 October 2015.
What has made you so passionate about strip shopping and helping your tenants?
My parents were migrants from Cyprus in the late 1950s and early 1960s when Paddington was a slum; it was a slum predominately occupied by migrants. The migrants were often living above shops in Oxford Street, Paddington and were starting clothes shops. I lived in Paddington and Guillaume’s restaurant was my local store, and I knew all the people who were running the stores.
I was criticised at school for being a spaghetti muncher. They were correct! It was the Italian and Greek Migrants that ate spaghetti, but look at what has happened to Australia. Ultimately fashion, spaghetti, olives were all brought by my parents and people like them that came to Australia in the 1950s and that lead to Oxford Street becoming fashionable. So from Oxford Street becoming fashionable from the migrants, I was there from the cradle and will be there to the grave.
How important is community?
My parents had a strip shop in Randwick. It was the center of the neighbourhood and everyone knew us but you don’t get that sort of community in a Westfield. From my point of view, I can come here to Jackie’s Café most days by myself and have a coffee and see someone that I know, and that reminds me of the café in the village of 1000 people from where my parents came. This is a village. I have done the same in Bowral – it is where I want to go to meet my friends and sit down and have a coffee. , I went and visited the village where my parents came from in 1974. There was only one telephone in the whole village for a 1000 people and it was opposite the café. I now look across from Jackie’s Café at that one phone box and consider the irony.
With rentals being high in shopping centres, what do you think the outcome is?
With the international chain stores paying such hefty rents in the city. I predict these overseas labels will start filling up the top end of Oxford Street, and that’s a good thing.
Are there any new initiatives for The Intersection?
The important recognition is the part Instagram is playing. We are really focusing on Instagram as a way of sending messages to our ‘village of people’, so we are drumming up support for The Intersection. I have recently employed Sally to handle our Instagram. What is fascinating to me is people are seeing a post on The Intersection on Instagram and they are enquiring where to get that piece of clothing. A woman in New York was interested in buying a hat she viewed on The Intersection Instagram and we were able to assist our tenants in selling it. From our point of view that is our number one initiative. Going forward we have a number of things we are working on but it’s a constant source of evolution of ideas. Amazingly, Woollahra Council have allowed me to put trees in pot plants along Glenmore Road. It was my idea to the council to put flags on Oxford Street. It took me five years of petitioning the council to get the plaques in the street approved. I am getting traction with the council; they understand I know what I am doing and need to be supported, not fought.
With the success of The Intersection does this inspire you to create something similar in strip shopping areas to bring them back to life?
Not in Australia.
What are you thoughts on Parramatta Road where there are rows of empty shops is there a way of bringing them back to life?
Ultimately whenever the government allows another Westfield to be built they need to understand they are killing the high street. There are absurd planning controls right throughout Australia that when you build a block of flats where there was a strip retail, you need to put retail on the ground floor and residences above, even though no one wants that retail. From my point of view, the government needs to accept that because they are approving Westfield’s, they should give up and stop forcing developers to put shops on the bottom of their development and allow them to build without shops. From my mind there is nothing more unattractive than having empty shops underneath. So from Parramatta Road I am hoping the government doesn’t require retail on the ground floor, as we are over-retailed. There needs to be recognition of that we are over-retailed.
Many non-vertical fashion independent retailers have been forced to close due to high rents and cost of outgoings. What are you thoughts?
I don’t agree it’s high rents, but sluggish retail conditions have affected them and the cost of doing business. This is a debate we are all having. Ultimately every retail business I have addressed, and there are many that have said the wages have far exceeded the rent. In every other city in the world you can offer flexibility in the work place and not have to pay penalty rates on Saturday and Sunday. What the government can do immediately is drop the weekend penalty rates but they won’t as it’s a political nightmare. I read a good article about how important the shop assistants were. The fashion retailer has a high component of the purchasing discussion with their customers. When you go into Scanlan Theodore on the weekend, they employ five or seven girls in there. The rent is the insignificant cost of doing business - it’s the wages that are high. I think landlords are flexible. There are many stories about Oxford Street rents coming down by half.
Online is growing and it is affecting retail strips to a certain extent. What are your thoughts about satisfying online shoppers while ensuring strip shops are still attracting visitors?
Initially when the Internet was in its early stages, I was very pessimistic about the effect it would have over retail. As it’s evolving I realised I was over-pessimistic and that the most successful Internet retailers are the ones that have bricks and mortar, too. I don’t think it’s as big a threat as people were talking about. Also, what has happened to the Aussie dollar will decrease people’s enthusiasm as will the 10% GST on all sales. I am not particularly panicked about it. At The Intersection, we are planning for our precinct to be the interaction of bricks and mortar and on-line retail.
What are you thoughts about Oxford Street?
It is an evolving area. There are 300 shops from Boundary Street to Centennial Park. Two of those shops have been bought by a jeweller who is moving from The Strand Arcade in the CBD. What that means is 0.66% of the supply side will now never be vacant again. I am not all doom and gloom for Oxford Street. More and more people will recognise that it’s cheaper to buy a building in Oxford Street, Paddington and set up their own store. Owner-occupiers have been looking at Oxford Street due the prices coming down and I think they are cheap.