Online shopping won’t grow forever, says Unibail boss creating

SYDNEY/ PARIS: Online shopping has its limits and physical stores will never go out of fashion, says the CEO of UnibailRodamco which is betting US$ 16 billion on buying Westfield to create a global mall giant.

The deal comes at a time when the traditional retail sector and shopping centres are under pressure to reinvent themselves in the face of fierce online competition led by Amazon.

However, Unibail-Rodamco chief executive Christophe Cuvillier predicted online shopping would peak at 20 per cent of global retail spending, up from 8-10 per cent now, although he did not give a timeframe.

“Internet will grow but internet cannot do everything. It’s very difficult to be profitable on the internet, particularly pure-play online retailers,” he told journalists on a call on Thursday.

“Retailers need physical presence,” he added, noting that largely online companies like Apple, Nespresso , Tesla and even Amazon had opened bricks-and-mortar stores.

Franco-Dutch group Unibail’s planned acquisition of Westfield will create a stronger competitor for the world’s biggest commercial property owner Simon Property Group, one with 104 centres and more than 1.2 billion visitors a year.

The deal gives Europe-focused Unibail, which owns Les 4 Temps and Forum des Halles in Paris and has centres spreading from Helsinki to Valencia, exposure to Britain, the United States and Italy, countries where Westfield operates 35 malls.

The acquisition is part of Unibail’s strategy of increasingly focusing on high- end ‘destination’ malls in landmark locations and Westfield would bring shopping centres in big cities like London, New York and San Francisco, which offer customers a wide range of restaurants, bars and entertainment. — Reuters