Kenneth Wong, president of Westfield Group’s U.S. operations, is overseeing a sweeping reinvention of the American sector of the giant shopping center operator. Listed on the Australian Stock Exchange, the Westfield Group’s portfolio consists of 130 shopping centers in Australia, New Zealand, the United States and the United Kingdom, valued at more than $30 billion. It is the biggest mall owner in the L.A. area. After acquiring several aging properties, Westfield is updating its U.S. malls to keep up with the competition and changing consumer tastes. Westfield Century City, one of the company’s 11 malls in the L.A. region, recently unveiled a theater and dining terrace as part of a $127 million renovation. But Century City is just the beginning, with upgrades of the area’s other malls either under way or in the works, and Wong is charged with building brand awareness of the company’s new offerings. Before starting at Westfield in 2003, Wong learned a lot about branding from nine years working on Walt Disney Co.’s developments. He also had stints at Related Cos. of New York, where he managed mixed-use projects, and at a short-lived Internet venture launched by DreamWorks SKG and Imagine Entertainment.
Question: What is the extent of Westfield’s L.A. renovations?
Answer:
We may be the biggest investor directly in the greater Los Angeles area. Over the next five-year period, we are scheduled to probably do over $2 billion of Westfield investment in the L.A. area. L.A. has very strong fundamentals. It is definitely going to continue to see population growth, job growth.
Q: What local Westfield properties are being redone?
A:
We are working on all of our properties all of the time and trying to read the market skillfully. In Los Angeles, we are debuting Century City, we will open Topanga about a year from now, we have a very exciting plan for Fox Hills, and we are working on the next phase at Santa Anita in Arcadia. We have very preliminary ideas for Valencia, and we have in Sherman Oaks people call it Fashion Square a plan that is a year or two behind, but very much in the pipeline. It is really a constant process. It is almost like a garden. Not everything blossoms at the same time, but you have to take care of it every day, all the time.
Q: Federated Department Stores Inc.’s takeover of May Department Stores Co. is reshaping shopping centers. What does that mean for Westfield’s properties?
A:
It is another chapter in a book that has been repeating itself. There has been consolidation in the department store industry for decades now. And the most recent big consolidation is that Federated, which owns, among other brands, Macy’s and Bloomingdale’s, has acquired May Co., which among others, has Robinsons-May, Filene’s, etc. Out of that merger, comes a consolidation of real estate, and the to-be-merged company has declared that they want to divest dozens of stores across the country. You can sort of have two attitudes about that: Oh my god, we are going to have an empty box we are going to have sales walk out the door. Or, you can say, we have a tremendous opportunity to take what is about to be redundant real estate and turn it into something.
Q: What is an example of Westfield transforming redundant real estate?
A:
Westfield Topanga in Canoga Park. That’s not an example of the Federated changeover, but there was a Montgomery Ward store that was defunct. We bought the store, and it became a platform for us to do the reinvestment that we are doing. In that case, we have taken a dark box, and we are tearing that whole section of the mall out. Sitting in its place will be something called the Oasis, which will be an indoor-outdoor space. Attached to that will be a dining terrace. It is the opportunity to bring a completely new product to the audience.
Q: What is the new retailing concept called at Westfield shopping centers?
A:
Hy-Style. One of the things that happened over the last decade is the interest on the part of tenants to have their own identity. In the traditional mall, the tenants tend to face inside. Increasingly, tenants want to be on a main street or facing outside to have their own identity show up. Likewise, customers who are starved for time want to be able to recognize their destination and go right to it. With department stores consolidating, with property really being ripe for regeneration, we can respond. Hy-Style is a hybrid or combination of traditional shopping centers and their virtues with what is called lifestyle centers and their virtues. The first one we did in a major way is up in San Jose, called Oakridge.
Q: How do you redevelop a shopping center without alienating loyal customers?
A:
Very carefully. I’ll be honest with you; we have been surprised with how well the construction period has gone for us. Foot traffic and sales are actually up during construction. To be fair, Southern California and Los Angeles is a happy part of the country. We are a growth area. We have gone about this fairly surgically, but it is still disruptive. What I think is most important is that when you are finished, it has to be a blow away experience. Otherwise, you wonder, what was all the trouble about?
Q: The Federated takeover has allowed shopping center operators to try retailing juxtapositions, such as a Target store next to a Nordstrom store, that were seen as unusual in the past. What’s your view on these?
A:
The Australian reach of the company is very helpful to us here because there has been a much more centralized intense use of land in Australia as compared to the United States. Australia has a much broader range, with grocery stores, apparel, luxury stores all under one roof. Along the way, American customers have become much more accepting of this. You have the Mercedes owner who pumps her gas at Costco years ago, that was kind of a joke. Today, it is normal.
Q: Why do you oppose the Shops at Santa Anita proposed by shopping center developer Rick Caruso in Arcadia near your Westfield Santa Anita mall?
A:
We don’t have opposition, per se, to the Caruso project. We think that the planning issues there are what everyone should focus on. We think that the amount of retail proposed for the site is way excessive and that it is going to create a ruinous market and that is the land-use decision that is facing the city of Arcadia and its citizens. The landowner wants to develop their parking lot. We see environmental impacts, congestion, and traffic as a huge concern.
Q: You came to Westfield after working at Disney as the president of development. What attracted you to Westfield?
A:
My whole career has been about making places for people. That is certainly what my time at Disney was about, with the theme parks and retail and hotels and cruise ship part of the Walt Disney Co. I like the fact that this is a consumer-based business, I like the fact that we are building a brand, and I like the fact that we are so well positioned in the United States to grow.
Q: How would you compare Disney’s corporate culture with Westfield’s corporate culture?
A:
They are actually very similar: very, very high energy and very strong work ethic. Each has pride in the brand. In this case, it is actually a bit fun for me because we are building a brand. Disney has a brand. We spent a lot of energy making sure we were polishing and protecting it. Here, we are trying to make sure the brand means something to people, which is not about slapping the logo everywhere.
Q: Speaking of Westfield branding, you are no longer using the Shoppingtown label. What happened with that?
A:
Shoppingtown was a bit of a made-up word that described what Westfield was about. It has places for shopping, but they are almost town-like in that you can meet your friends there, and there is a post office there. You can get your groceries there. That is the Australian model. When we started it here we said, ‘Westfield can be anything.’ Shoppingtown was kind of a mouthful. It helped people associate us with an activity, a purpose, or some kind of use. Now that we have reached that point of awareness, we debated, is it getting in the way and confusing things? It wasn’t a particularly American-sounding word. We decided to let go of it.
Q: You have an undergraduate degree and a graduate degree in architecture. What made you choose a career in real estate and shopping centers?
A:
There was a professor who asked me to stay after class, told me I was wasting my time doing anything but going straight to business. He said, ‘You are destined to be a business leader. I want to tell you to direct all of your energies into that.’ He had an instinct. I was in a three-year graduate program. I was discovering that I really wanted to be more in the business and entrepreneurial side. From that day forward I said, that’s it, he’s right.
Q: Do you enjoy shopping?
A:
I am a very impatient, very directed, very selected shopper, which I guess is a typical guy. Like someone said, we gather, but we don’t hunt very well.
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Kenneth Wong
Title:
President
Organization:
Westfield Group, U.S. Operations
Born:
1956, New York City
Education:
B.A. architecture, UC Berkeley; M.A. architecture, MIT; M.A. urban and regional planning, MIT
Career Turning Point:
Being held after class by a graduate school professor and told to enter the business world
Most Admired People:
Frank G. Wells, Lance Armstrong, Thomas Jefferson, Leonardo da Vinci
Personal:
Married, two children
Hobby:
Collecting art, sprint triathlons, skiing
