Failing firms mark East London's malls

Newly opened Hemingway's mall 'immune'

As the economic gloom deepens and the new mega mall at Hemingways promises to intensify competition, casualties are beginning to mount.

In Gonubie's King's Mall four stores have closed, adding to already empty shop space.

Across town Mdantsane City Shopping Centre has seen six businesses close their doors since opening in April last year.

Industry players have pointed at the recession as the main culprit for the fallout, while others have downplayed closures as being part of usual attrition rates.

King's Mall's biggest tenant, Götz von Westernhagen, who owns the anchor Spar store and upmarket deli Barons, said businesses were not doing well because of the tough times.

He said plans to develop shopping malls were done long before the recession and “there is no turning back now”.

“It is difficult for stores that are selling some up-market accessories because they are not a necessity, even though they are nice to have.

“People are using their money for what is necessary because of the economic situation,” Von Westernhagen said.

He predicted the new R1.6billion Hemingways Mall being built by the Billion Group would have a major impact on competitors.

But general manager of Mdantsane City Nobubele Ncube said the small stores that had since closed were not trading well and that the centre would continue to do well.

“It is normally expected in the early opening stages of shopping centres. Casualties are a norm in shopping centres until an optimal and site-specific tenant mix has been achieved.

“These will be replaced with exciting brands already signed up and currently completing shop-fitting work,” Ncube said.

Ncube said the centre had achieved above the current retail growth levels, with foot traffic realising a positive growth equating to 715000 visitors a month in 2009.

But owners of failed stores told a different story.

Clothing store Beaver Canoe vacated the centre after only a week in Mdantsane.

“The mall was a disaster from day one because there were just no feet there,” said Durban-based company boss Craig Botha.

“It was not feasible - there is no taxi rank and people seemed to prefer going to East London, where there is everything.”

Roman Pizza managing director John Nicolakakis, another casualty at Mdantsane, said they had to close shop because the store was “unfortunately trading very poorly”.

“The mall was very quiet when we first started. The biggest challenges we were faced with was the fact that there was a lack of feet in the mall, which led to very poor sales,” said Nicolakakis.

Despite these worrying signs, Billion Group spokesperson Gerna van Rooyen said the new Hemingways Mall would be immune.

She said market research had proven that regional malls “consistently perform well”.

“This is mainly due to the fact that as a large regional mall, it has a much larger catchment area than other malls in East London,” Van Rooyen said.

Vincent Park's management were approached for comment but requested a meeting next week.

Source: Daily Dispatch

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