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Posted On Wednesday, 30 April 2003 02:00 Published by
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A pioneering initiative which has seen smaller tenants in a new shopping centre receive free consulting services on retailing is to be replicated in other major complexes around South Africa.

A pioneering initiative which has seen smaller tenants in a new shopping centre receive free consulting services on retailing is to be replicated in other major complexes around South Africa.

The extension of the service follows its successful introduction by Old Mutual Properties at Gateway Theatre of Shopping, the massive shopping leisure and entertainment complex at Umhlanga. The service, introduced last November, has paid off in significant growth in turnover, say some smaller Gateway tenants.

Old Mutual Properties MD, Ian Watt says the service was introduced at Gateway as a landlord initiative to support small traders meriting assistance through difficult periods, particularly in the early stages of a shopping centre’s life.

“Small traders, often localized, one-shop operations, are a distinguishing feature at a growing number of complexes.

“This trend has highlighted the need for a win-win relationship for landlord and retailer and for both parties to apply themselves to real issues causing difficulties in newer complexes. Following the success at Gateway, we will now introduce the service at other centres in our portfolio.”

Barry Nesbitt, MD of re: solutions, the specialist consultancy offering the service, says the initiative by a landlord to appoint a specialist to work with retailers in a shopping centre has not been undertaken in South Africa before. He commended Old Mutual Properties for its vision and courage.

“When Gateway opened, there were perceptional problems between tenants and centre management. Tenants, some of whom had little business experience in the price-driven Durban market,  were concerned that not all shops were open, that because some leading retailers were not represented, the centre would thus not be a one-stop destination and that the marketing effort was lacking. This led to misunderstandings and the formation of a tenants’ forum to represent the interests of disaffected tenants.

“My thrust has been on helping retailers make their offerings better by refocusing on the basics of retailing and concentrating their energies on their operations and not on criticism of the landlord. Our approach is that mastery of the basics and answers to poor performance in retailing are not found in corporate boardrooms but on the shop floor.

“In the five months since appointment, I’ve engaged with 60 tenants and completed 100 assessments of tenants at Gateway.

“These assessments are based on an understanding of the store and its rating according to the five P’s of retailing. These are positioning, product, people, presentation and promotion which when effectively combined result in an improvement in performance levels. Training programmes to support the five P’s have been specifically developed for small retailers in a shopping centre format, and these along with individual store assessments address any deficiencies overall in the tenants’ offering.

“On positioning we work with tenants on identifying their brand personality and what the business stands for, and what are the major product attributes. In terms of product, we work to ensure that the merchandise management and assortment planning is clearly focused and does not confuse customers. The people area is centred on performance management and development of service and selling skills.  The final category is management of promoting the business which is critical in the building of the retail brand.

“Results to date include a significant growth in turnover from tenants under my direction and a better understanding of the basics of retailing on the part of their management and store teams. Additionally re: solutions involves centre management in this process to educate them about the art of retailing. A non-adversarial community of interest between landlord, centre management and tenants is being developed, along with a dissipation of anger among tenants as they refocused their attention on trading opportunities and not on the perceived or real problems of the centre. “

Gateway tenants concur. Arnold Kerr of Graphic Art and Décor, says:
“Although it was outside Barry’s ambit to heal past differences, he was able to open communication lines between management and tenants again. He was impartial in his approach and we valued his assessment and input into our business. At a time when tenants were made to feel that the reason they were not performing well was that they were bad retailers, Barry offered encouragement and a positive outlook as well as constructive ways to improve retail performance. We have accepted that Gateway will take in the region of two years to become a mature centre and are steadily trying to improve through any constructive means. We see re solutions in a facilitative role providing input from and to management as well as providing skills training in certain key areas.”

Norman Halse of Action Zone says: “We applied valuable advice on positioning and merchandising to position Action Zone, and the customers that we are targeting are starting to come and shop. This initiative of consulting to the tenants is progressive. Tenants need all the help they can get in the ever changing retail environment that they operate in.”

Neeraj Lalu of Code Red says: “The initiative of Old Mutual to assist tenants by outsourcing professional assistance has helped to focus the business and to put together a professional programme and a time-frame to develop the business.

Barry’s experience and knowledge has given us the benefit of being able to eliminate trial and error and has helped us fast-track the progress of our business.”

Nesbitt says his role as an objective outsider is to keep close to all the tenants and to help build relationships with tenants and centre management.

“When I visit tenants I am accompanied by centre management who are thus seen to be accessible and transparent and quite often can take decisions on the spot. Centre management can also learn the tenants business and understand tenant complexities through our interaction. If a tenant is in trauma, they can support the tenants emotionally.

“Our next step is to provide tenants with regular reports on Gateway and national retail performance so they can establish how they are doing in their sector in the Gateway centre and against the retail industry.”

Re: solutions’ contract at Gateway has now been extended by another six months.


ISSUED FOR: Old Mutual Properties
BY: Michael Kerkhoff & Associates
ENQUIRIES: Ian Watt (021) 530 4537
                      Barry Nesbitt 083 290 5790

Publisher: Old Mutual Properties
Source: Michael Kerkhoff & Associates
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