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Saturday, February 19, 2011

Bangsar Shopping Centre constantly reinvents itself to keep up with competition

Upgrades to the BSC in Bangsar are over as there’s no more space left.

BANGSAR Shopping Centre (BSC), which was developed some 20 years ago by Bandar Raya Developments Bhd (BRDB), is still a successful and thriving mall today.

This is despite having to face competition from malls such as Mid Valley Megamall, Bangsar Village I & II and Tropicana City Mall, which are all located within a radius of less than 5km.

John Sironic likens BSC’s lasting power to how Madonna has remained relevant after all these years.

BRDB group retail operations head John Sironic likens BSC's lasting power to how the Queen of Pop, Madonna, has remained relevant after all these years.

“The key is never to stay still, like the Madonna Principle. The reason she has been able to be around for so long (in the music scene) is because she's constantly reinventing herself,” he tells StarBizWeek.

“That's how we have been around for so long. We can't rest on our laurels. We need to keep reinventing ourselves and be up-to-date with the latest trends,” Sironic adds.

According to Sironic, BSC started off about two decades ago with just a single (East) wing.

“About 10 or 12 years ago, we added a new (West) wing,” he says.

In February 2008, BRDB invested RM250mil to upgrade BSC as it felt that the time was right to “reinvent.”

“The mall had been around for so long and it was starting to look a little old. So, we redressed the mall both internally and externally,” Sironic says.

Upgrades, which included a new annex and a 12-storey office block at the back of the mall, took over a year to complete.

“We completed the construction in July of 2009. The job could have been done a lot faster but to do that, we would have needed to close down the mall.

“But we did not do that because we did not want to cause inconvenience to our shoppers,” Sironic says.

The refurbishment of BSC saw the mall increase its floor space to 325 sq ft from 262 sq ft previously. The number of shops also increased to 170 from 126 before.

Sironic also says the addition of new stores was timely as people had become more affluent over the years and had better spending power.

“We felt that it was time to make the mall more contemporary and current. We also felt that we owed it to our tenants, some of which also upgraded to larger lots.”

Sironic says that during the upgrading process, BRDB also took the opportunity to “reshuffle” its tenant mix a little for the better.

“We did some retail zoning and decided to cluster certain tenants in certain areas. So now, you have tenants that specialise in information technology in one area, services for women on one side and home furnishing or jewellery in certain locations.”

The need for reinvention is necessary, especially as needs to compete with malls such as Bangsar Village I & II, which are arguably its closest competitors.

Bangsar Village I “opened its doors” in 2004. Sironic admits that BSC did experience a slight drop in shoppers when the new mall started.

“Initially, there was an impact as shoppers were curious to see what they had to offer. However, people are creatures of habit and after a while they go back to the mall that they had been shopping at for so long.”

Sironic argues that BSC is different from its nearest competitors.

“BSC has a large F&B (food & beverage) offering. The layout of our mall is also different. We have an open front and it is not shaped like a box.

“Even our entrance has no doors and this provides an inviting, resort-like feel.”

Despite conducting the renovations in the thick of the global financial crisis, Sironic says BSC did not see any real drop in shoppers.

“We think this was because we (BSC) have been here for quite a while and our customer base is quite loyal.”

BSC's shoppers generally comprise a more affluent crowd especially expatriates.

“We get a lot of expatriates because they live within the (Bangsar) area. Our mall has sort of become like their backyard. A lot of them come here in simple clothes, wearing a pair of shorts and slippers. We're not a shopping centre that requires you to dress up.”

Sironic says BSC has always positioned itself as a lifestyle, boutique mall that has niche tenants offering niche products.

“We are not intentionally expensive (in terms of product offering). We have small boutique retailers that don't necessarily attract a mass crowd.

“However, I think it is a misconception that we only attract expatriates or only high-end shoppers. You get a large local crowd as well and despite our niche tenant mix, we cater to all income segments.”

Despite having niche tenants within its premises, Sironic says BRDB is open to any kind of tenant that is interested in setting up shop at BSC.

“We don't want cannibalisation, in that we don't want to have tenants that offer the same kind of products. However, we're open to all tenants. We never say never. But for now, our retail mix is complete.”

Pulling in the crowd

One of BSC's key anchor tenants is Cold Storage supermarket, which is a popular attraction for shoppers.

Sironic says it is a misconception that prices of goods and products at BSC's Cold Storage outlet are overpriced.

“From the discussions that we have with them, we understand that they regularly conduct price checks with other competitors to remain competitive.”

Other than Cold Storage, Sironic says other tenants are equally important in terms of “pulling in the crowd.” “They also act as anchors in their own way.”

Many successful malls today have a cineplex as part of their tenant mix. Some time back, BSC had a couple of cinemas but no longer. Sironic says there are no plans to have a movie theatre at BSC.

“For cinemas to be successful, you need a huge area to accommodate multiple cinemas. Because we're not a large mall, we do not want to cater too much space only for movie theatres.”

According to Sironic, the average rental rate at BSC ranges from as low as RM3 per sq ft to RM50 per sq ft.

“It's a wide range and depends on location and usage,” says Sironic. According to him, about 32% of the mall's floor space comprises F&B tenants, which is unusually high for a typical mall.

“We have a wide range of F&B tenants, which include American fast food, coffee shops, fine dining, lifestyle and outlets that cater to a much younger crowd. We want to have a mall where anyone can come and just enjoy themselves.”

BRDB is also planning to open up a 10,000 sq-ft food court in BSC by mid-year.

It also plans to offer free shuttle services from the Bangsar LRT to the mall by next month.

“Once the food court opens and together with the new shuttle service, we expect to attract more customers into the mall, Sironic says.

Sironic says BSC organises three types of promotional events to attract shoppers. First, it hosts activities that are done by external parties.

Case in point is local Peugeot distributor Nasim Sdn Bhd which launched its 308 cc Cabriolet convertible at BSC last month.

“Other promotional activities are done by our tenants themselves and then, there are also calendar-based or festive events.”

Sironic says Christmas is often its peak period in terms of sales, followed by the Chinese New Year festive season.

“Christmas is also a big period because it's the year-end and a time when people get their bonuses,” he says.

BRDB's Grade-A office block, BRDB Tower, meanwhile, currently has a 50% take-up rate. Sironic says BRDB intends to fully lease the 12-storey block by the third quarter of this year.

“Our tenants include banks RHB and Al-Rajhi. There's also a gym and a neurological specialist coming, he says, adding that BRDB is offering “Grade-A” office rates to its tenants.

Sironic says BRDB targets tenants that can also take advantage of the mall's services and facilities.

For now, upgrades to BSC are over, he says. “There's just no more space. We've expanded as much as we can.”

However, setting up a new BSC in another location is definitely a possibility, he adds.

“A new BSC is possible. We're always looking for opportunities. It (setting up a new mall) could be done either independently or via a joint venture.”

By The Star

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