Westfield, bouncing baby of the shopping world

London's largest shopping mall is defying the recession with 500,000 visitors a week including a host of celebrities, its boss said today.

Westfield's managing director, Michael Gutman, told the Evening Standard the £1.6 billion, 43-acre precinct in Shepherd's Bush was on track to exceed its annual target of 20 million visitors.

The complex, which opened six months ago, has become the shopping destination for Girls Aloud, David Attenborough and TV chef Jamie Oliver. Many of England's cricketers, Gary Lineker and Geri Halliwell have also been spotted there.

The positive outlook comes as Westfield today announced it was taking the pressure off retailers by reducing service charges.

A dispute over the fees to maintain the complexhad strained relationships with tenants, who were keen to cut costs during the recession. At £14 per square foot the charges have been around 50 per cent higher than anywhere else in Britain.

A group of 23 leading chains including Body Shop, Boots, Debenhams House of Fraser, Marks & Spencer and Waitrose were locked in talks about a reduction for months. Westfield said the charges were set high because of the sheer scale of the shared space that required cleaning, lighting and maintenance, but it is now able to put in place a more precise rate after six months of operation.

Today Mr Gutman said: "Yes, they'll be a reduction. This is what we've been doing at our other seven buildings in the UK, where we recently reduced service charges by 10 per cent.

"We're starting to get to the point now at Westfield, with six months under our belt, of understanding the trading patterns of the building and getting a much more precise view of what the service costs should be.

"A decision will evolve within the next few months. We're working with consultants and service providers to get to the right rate for the building. I expect to get to a solution that's agreeable to all. There will be an adjustment at the end of the year."

In a clear reflection of retailer confidence, the much-awaited Louis Vuitton store is to open next month, after a delay to allow it to double its size.

Last week Rob Templeman, chief executive of anchor tenant Debenhams, singled out the performance of the Westfield branch as it posted a 10 per cent rise in profits.

Waitrose said sales at Westfield were 2.5 per cent ahead of budget compared with a national average of 1.9 per cent above forecasts.

Sales of barbecue and deli counter food were said to be particularly strong.

The Louis Vuitton opening appears to underscore the way Westfield has transformed the way Londoners shop, providing the prestige of Bond Street and the high-street edge of Oxford Street under one roof, without the cramped pavements and parking problems.

Mr Gutman added: "We're establishing a new business in a new location in a very difficult time and we're happy with the way things have started. We're really delighted with that.

"The feedback from many of the retailers is that their Westfield store is in the top five in their portfolio.

"We're a fraction of the size of the West End but we've seen flagship retailers like Apple and Nike doing exceptionally well at our centre.

"We haven't created Bond Street or Knightsbridge - that's not what we're about here, it's about democratising luxury." The Shepherd's Bush precinct paves the way for a similar project in the East End.

A £681.5 million shopping centre is set to be built in Stratford near the 2012 athletes' village.

Westfield has put other schemes in its global portfolio on hold during the recession but believes time-pressed Londoners have shown they are ready to embrace the concept of a giant, inner-city mall. Nevertheless, Mr Gutman admitted the slump in consumer confidence at the start of the year was a challenge and six of the 280 shops had closed as companies across Britain went into administration.

But he added: "We're starting to see some kind of stabilisation. We're starting to see some more positive signs from consumers than we've seen for some time." The recent influx of tourists to London, lured by the weak pound pushing down the costs, was a big boon to the centre, he added.

Sales to non-euro zone overseas shoppers at Westfield were up 27 per cent in March on the previous month.

Mr Gutman said: "Take a walk around here at a weekend and you'll hear Spanish, Italian, Russian, Chinese. Foreign shoppers are a significant area of growth." The mall has 45 concierges speaking 14 different languages.

Westfield is the biggest investment by a private company in the capital for decades, with £170 million spent on building two new stations to serve the complex, one overground and one for the Tube.

The central atrium is the size of a football pitch and if the 96 escalators were placed end to end they could take a shopper to the top of Ben Nevis and down again.

The Westfield group runs 119 malls in four countries - the US, UK, Australia and New Zealand.