Aussie pioneer bails out

THe £18.5bn sale of the Westfield shopping centre colossus by self-made Australian billionaire Sir Frank Lowy to an ungainly named european rival unibail-rodamco is a signal moment.

it suggests that Westfield, which invented the concept of shopping centres as a life experience – replete with fancy cinemas, upmarket eateries and luxury brands – is calling the top of the market.

it comes hard on the heels of the proposed merger between Britain’s Hammerson and intu, which binds together the owners of Birmingham’s Bullring and Manchester’s trafford Centre.

Both deals show shopping centre owners are seeking scale and cost savings in the face of the onslaught of digital shopping and changing consumer tastes. Both Westfield and Hammerson have shown that with the right incentives (low introductory rents) they are still able to fill their malls with the best high street names.

Companies such as next still retain some faith in bricks and mortar in spite of a great online offer. But as Marks & Spencer has shown over the last decade, fashion retail is like running uphill and that is why it has embarked on a store closure programme. the Westfield deal is sweeping in its reach. it adds 35 of the most valuable shopping centres in London and the united States to the bloated unibail-rodamco portfolio. But looked at analytically, it doesn’t make a huge amount of immediate financial sense. the financial uplift of an estimated £88m is minimal compared with the size of the transaction.

Brilliant entrepreneurs like Lowy do not sell on a whim. One must assume something much more fundamental is afoot. even though shopping centres can revitalise shabby neighbourhoods as is being seen in the centre of Bradford, Croydon and Shepherds Bush in London, where Westfield has sprinkled gold dust, the question is for how long? Going to the mall may once have been a great experience but evidence suggests that millennials are searching for something else in the shape of foreign travel, convenience shopping, and coffee shops in hipster areas rather than vast indoor emporiums, however glitzy the chandeliers and capacious the car parks.

Many of the best-known names in uS retail, including Macy’s and JC Penney, are closing stores at a rapid rate. Here in the uK, Sainsbury’s bought Argos as part of an effort to keep Amazon at bay as the American predator moves into groceries with the purchase of Whole Foods.

Billionaires as smart as Lowy do not retreat from dynastic ambition unless they can see the writing on the wall.

Sky sell-out

AnOtHer elderly entrepreneur likely to execute a Cruyff turn this week looks to be rupert Murdoch.

now that cable giant Comcast has taken itself out of the battle for control of 21st Century Fox assets, Disney looks odds-on favourite to secure the creative side of the enterprise, plus the stakes in Sky in europe and Star television in india.

Because it is in the nature of media to be interested in other media, expect much of the focus of this transaction to be on the wealth it creates for the younger Murdochs, the future role of James Murdoch at Disney and the ownership of Sky news.

But there is another issue at stake for a Britain seeking to be a powerhouse of new media and creativity.

the disposal of the 39pc of Sky owned by 21st Century Fox to Disney, and likely eventual full ownership, means that Sky’s mastery of satellite broadcasting, its advances into streaming and social media will all be gobbled up by a foreign giant.

Once again the uK will be denuded of skills, a uK corporate taxpayer and patents and intellectual property central to the nation’s post-Brexit future. the Government should insist on an assessment of the economic and cultural implications before Disney is allowed to absorb Sky.

Somehow one doesn’t see it happening.

Horror film

WiLL the ambitious takeover by Cineworld of uS rival regal get done?

Shares in Cineworld are down more than 20pc since the deal was unveiled and a lead investor, royal London, is expressing concern about the amount of debt being taken on.

royal London would have preferred more modest european expansion and a return of cash to investors.

Whatever happened to ambition?