Today (Tuesday 13 September) sees the glittering opening of Europe’s largest shopping centre at the Olympic “city” in recycled Stratford, East London. The stats and stars will scream from screens and front pages for days and weeks. More than 300 shops, 70 restaurants, 14 cinema screens, three hotels and the UK’s largest casino are the latest $1.4bn Westfield story. PR chiefs are in overdrive about the “shopping Olympics”. And all visitors to the Olympic stadium will have to walk through the Westfield centre to get to the races.
It is a fine “earlybird” opening for London’s Olympic year and the latest splash by Westfield whose 2008 opening in White City on the other side of London was, until now, Europe’s largest shopping centre. Appropriately, the showcase comes from Australia, a country with its fingerprints all over the London Olympics whose site (like its Sydney 2000 predecessor) was developed by the Brisbane-born Sir David Higgins.
Stratford is the latest triumph for Westfield, in a long line of sparky Aussie businesses that have stormed across the US and UK (News Corp, Lend Lease, Macquarie, Fosters, BHP Billiton, Rio Tinto, QBE and counting).
These are, for sure, eventful times for Frank Lowy, the remarkable 80 year old Czech-born Australian-Israeli who created what is now the world’s largest shopping centre business from a modest start in Blackrock, west of Sydney 50 years ago.
Westfield Group today has some 120 major shopping centres across Australia, New Zealand, the United States and the UK. The A$58bn group and a personal fortune said to be some A$5bn have punctuated a long journey for the 23-year-old penniless refugee who arrived in Australia via Israel in 1953, 9 years after losing his father in Auschwitz.
Lowy was always a man in a hurry and opened his first Westfield centre within a few years of becoming an Aussie. And, in 1961, came his first purpose-built shopping mall in Hornsby on Sydney’s North Shore.
Lowy’s is a gritty and glittering story capped by renowned, relentless philanthropy in Australia and the US, for Jewish, cancer research and other causes. In 2002, he was tagged ‘Australia’s leading philanthropist’ after he donated all his A$11m year’s salary to charity. The following year, to mark his 50th anniversary of arriving in Australia, Lowy established his Institute for International Policy, a think tank devoted to foreign affairs and Australia’s role in the world. Many Australians will know him equally as the creator of Westfield and as a determined patron of the Football Federation of Australia (formerly Soccer Australia). His longterm crusade on behalf of the ‘beautiful game’ in sports-mad Australia earned Lowy the 2010 ignominy (alongside Prince William, David Beckham, David Cameron et al) of failing to get much FIFA support for a World Cup bid. Something else the UK shares with its super-fit, one-time colony.
This week’s London opening might be a chance for the wider world to catch a glimpse of the legendary Frank Lowy. But don’t bet on it. In May this year (a few months before another Australian business legend, one Rupert Murdoch, asserted that 80 was no age to retire) Frank Lowy handed over the executive reins to his sons Peter and Steven Lowy, as Joint CEOs of Westfield.
This is where our interest in Westfield can begin. Last month, Frank’s boys had to front up some tough financial results (and not much future-comfort) from the company’s US portfolio; and ambitious, shouty plans to expand in Milan, at the new One World Trade Center in New York, and right across Brazil. Retail observers grinned and some sniped that the Stratford City development might just be a Westfield bridge too far in the UK’s ailing retail economy.
Investment analysts say the gilded Lowy brothers are pursuing a high-risk strategy in high-growth markets – very bitter-sweet. But, perhaps, it is really all about wondering just how this generation baton-change will go. Betting on whether this will be “clogs to clogs in two/three generations” is a pastime not confined to Australia. But this generation of Australian business legends provides some especially fascinating sport.
First up was Andrew Roberts who pushed his family’s Multiplex construction business headlong into the UK. His loss-leading flagship contract was the new Wembley Stadium. Oh dear! A few years and tens of millions of lost pounds later, Roberts’ dream collapsed amid delays, cost-overruns, stories of spot market poker on steel supplies – and his bolshie workers placing bets on completion delays. Soon after the stadium was finished in 2007, so was his family’s control over the company founded by his father 45 years before. Sorry, Dad.
Next came James Packer who rushed to dispose of his father’s long-time television and magazines business just months after Kerry’s death in 2005. He promptly loaded up with international investments in casinos, alongside his high-performing venues in Melbourne and Perth. It looked like a fast-paced, dangerous game with stretchy investments in Las Vegas and Macau. There followed two years of sweat as the riskiest casino bets were offloaded and commitments paid-off. And, now, five years later, Packer’s casinos in Australia and Macau are going great guns; and the private equity firm CVC, which shelled out A$5bn for his media business, is still hopelessly under-water: yesterday’s media bought at last decade’s prices. Symbolising the Packer bounce-back, the super-gloss casino at Westfield’s new centre is operated by – James Packer. The father who made a good chunk of his fortune from selling his Channel Nine TV station to Alan Bond for billions (before buying it back for pennies), is smiling alright.
Gina Rinehart, newish “Australia’s richest person”, is showing that earlier, long-running legal spats with her stepmother (before Gina dramatically turned round the family’s mining fortune) were no aberration. The feisty Perth-based magnate (who is stretching her wings into media investments) is being sued – by her 26 year old daughter, over a mysterious “commercial dispute”. Mum is promising a fight.
Rupert Murdoch may or may not find himself fighting to retain control of News Corp, the company he created from the tiny base of his inherited Adelaide newspaper. But there are all the ingredients of a good old family feud – or fade-out: James Murdoch may just have missed the point repeatedly as his key executives sowed the criminal seeds of destruction for the group’s UK newspapers amid phone hacking and worse. Or he may end up in jail. Lachlan Murdoch, once his Dad’s right-hand, is still a News Corp director but is resisting the temptation to get back into the fray. And Liz Murdoch, who has richly sold her Shine TV production business to News Corp, is not sure she will enjoy life in the company that may (soon enough) not be a family business at all. And the dynasty was so well set up.
And, then, there are the Lowy brothers: serious, smart investment bank-trained grown-ups both. How will they emulate the achievements of their self-made, once-starving father? How can Westfield – cash-rich product of an age when shopping became a leisure activity – keep growing in an era of online shopping and not so much shopping at all? What can the company, which managed to export shopping centres to very the home of shopping centres, do for an encore?
Are today’s glittering celebrations the beginning of a long, slow sunset for Westfield? Or is it Olympic gold for the next generation?