Westfield retailers unite in outrage at service charges

The dispute over service charges at Westfield London has escalated as more retailers join the fight against the landlords' demands.

WHSmith and Fred Perry entered the fray last week, appointing service charge consultancy Profile to engage with Westfield over the charges.

Profile is also acting for around 15 other retailers in the scheme, including anchors Marks & Spencer, Debenhams and House of Fraser, as well as New Look, Sports Direct, Waitrose and Boots.

Other retailers understood to be in talks with Westfield over the charges are River Island, Arcadia and Inditex, which has four stores in the centre.

In November last year it emerged that Westfield London had increased its service charge to £14 per square foot – £6 per sq ft more than the amount quoted by the landlord when lease terms were first agreed.

WHSmith property director Chris Williams confirmed the retailer had enlisted Profile to review the service charge. He said: "The service charge at Westfield is high and in the current climate we're all looking to get best value for services in centres."

Profile managing director David Howell said more retailers at Westfield are likely to approach the landlord in the coming weeks.

"There will be other retailers joining in as this progresses," he said. "As the word spreads, tenants become aware of what's going on."

Profile is working with Westfield to establish a rate it considers reasonable for its clients, a process Howell said might take up to another four months.

A Westfield spokesman said: "Westfield has been working to manage the cost of service charges at all its centres. Due to a range of initiatives we expect to be delivering savings in the 2009 budgets across all existing centres – except Westfield London – in the vicinity of 10 per cent.

He added: "Costs and services provided will continue to remain under review to ensure we are always delivering to the expectations of our customers and responding to market conditions. Westfield London is also being reviewed for opportunities. However, given it is in its establishment phase these reviews will be ongoing."

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