Speech by Tan Sri (Dr) Francis Yeoh:
I can judge from the huge response from both Malaysians and travellers from around the world that Starhill Gallery has already gained a unique personality of its own. It takes much time, passion and patience to appreciate someone’s true personality. This is the reason that Starhill Gallery is revealed act by act, like a good play and saving the best for last. Today marks the end of this first play and I am very sure there are many more exciting episodes to follow.
Some members of the media have touted the Starhill Gallery as a Palace of Infinite Indulgence. For some, this sounds like Heaven on Earth which we do not claim to have created here and for others it smacks of Hell, which we do not want to be associated with at all.
Starhill Gallery is actually a Gallery of Rich Experiences. We commissioned designers and artisans from around the region and the globe to make sure that these are accomplished. We knew from the outset that we will not commoditise passion and craftsmanship. It is clearer now why we named the floors the way we did, Muse instead of Art, Adorn instead of Jewellery, Indulge instead of Leather Goods and Handbags, Feast Village instead of food and beverages, Pamper instead of cosmetics and treatment.
YTL pioneered in making KL an exciting shopping destination
Ladies and Gentlemen, when YTL took over the JW Marriott, Starhill Centre and Lot 10 Shopping Centre in 1999 in Bukit Bintang, it was slowly turning into a crime infested and red light district. YTL sought government approval to create Bintang Walk to prevent further deterioration and the Government and City Hall responded quickly and positively.
Bintang Walk a catalyst to retail
Millions of KLites, Malaysians and travellers have enjoyed this environment in Bintang Walk since its creation by YTL in 2000.
YTL moved the low market food court in Starhill Centre with a modern looking 400 seats modern food court to the Lot 10 shopping centre. This strategy worked as we have served over 4 million meals since its opening. With this improved traffic, Isetan reinvested heavily in their supermarket adjacent to the food court.
Isetan further invested by upgrading their whole store because of the improved traffic from Bintang Walk. The traffic in Bintang Walk is both improving in quantity and quality as judged by the latest surge in rental rates and rental enquiries in both Lot 10 and Starhill on Bintang Walk.
Duty Free a catalyst to retail
Ladies and Gentlemen, in 1999, the only items that were duty free were watches and cameras and we noted these tenants were the only ones paying high rental rates and paying on time. Other retail goods were attracting duties as high as 40%.
Once again,we sought approval from the Government to reduce these duties and the government promptly did it in a record 4 months. I’d like to applaud the government for that.
With branded goods free of duty, retailers from around the region and the world began to take notice and started to reinvest in retailing in Kuala Lumpur.
As opposed to competing retail centres in Singapore and Hong Kong which have decades in head start we are only 5 years old in serious retailing.
Despite this lag, Lot 10 and Starhill Gallery have done very well to attract regional and global retail principals.
Bintang Walk has obviously benefited Lot 10 tremendously as it caters predominantly to general consumers from the local markets and therefore the base of this traffic is high and you see visible traffic in Lot 10.
The positioning of CK Tang department store was however not in sync with the other YTL properties flanked by the 5-star JW Marriott Hotel, The Ritz-Carlton Hotel, The Residences at The Ritz-Carlton and global brands present at the old Starhill Centre. YTL bought the old CK Tang premise to reposition it to an upscale retail centre complementing their neighbours’ profile.
David Rockwell from New York and many other iconic mall designers from around the world were engaged to give the new Starhill Gallery a facelift.
YTL also engaged the renowned branding guru, Interbrand to reposition Starhill. Interbrand turned dowdy Selfridges in London into an exciting destination and increasing their sales dramatically.
Global Brands Exclusively available at Starhill Gallery
Ladies and Gentlemen, today more and more retail principals do not rely on agents to retail their global brands. They have purchased back many franchises from their agents. This was done because agents in the past have not been promoting their brands and therefore their sales well because of the lack of experience and also the lack of budget.
Global principal retailer Louis Vuitton is investing millions for their new global store concept backing the vision of the repositioning of Starhill Gallery. So are other brands like Christian Dior, Dunhill, Givenchy, Fendi, Celine etc.
The global retail leader Louis Vuitton Moet Hennesy Group (LVMH) has all their brands exclusive to Starhill Gallery. These include Louis Vuitton, Christine Dior, Fendi, Givenchy, Loewe, Kenzo, Celine.
The LVMH Group are excited with our vision and strategy and have managed to convince other global brands to open stores in Starhill Gallery. These include Valentino and Hermes and many others.
The non LVMH Group brands that are available only in Starhill Gallery include, Porsche Design, Asprey, Garrard, DKNY, Mulberry, Valentino, Lanvin, Lancel, Brioni, Jim Thompson, Bang & Olufsen, Alessi and TUMI and Kwanpen. Under discussions are Longchamp and many others who are prepared to be exclusive at Starhill Gallery.
As a result of these popular iconic global brands available only in Starhill Gallery, it has benefited from this very high quality traffic.
Starhill Gallery in Kuala Lumpur is so attractive a shopping centre that many global brands have decided to fast track their investments in Starhill Gallery, Kuala Lumpur instead of neighbouring shopping centres in one way or another. The brands that have done this are Porsche Design, Asprey and Garrard of London, Anne Klein of New York, Mulberry.
These trends can also be judged by the increasing number of regional retailers investing in Starhill Gallery in Kuala Lumpur.
Starhill Gallery the Global Fine Watch Retailer
The retail prices for luxury brands are usually globally controlled, which means the principal retailers have better margins in Starhill Gallery because our rental rates are much more competitive against regional locations.
It is substantial as our rentals are one third of that of some and as much as one tenth of one popular watch centre. Our sale to rental ratio is therefore attractive.
As a result, fine watch retailer, Swiss Union has tripled their investments in retail space whilst the Singapore fine watch retailer, Cortina has doubled their investments in retail space. Yafriro of Singapore is also looking for more retail space in Starhill Gallery.
At 20,000 square feet of fine watch retail space Starhill Gallery is the largest fine watch retailer in the world! This is further enhanced by the investments of major watch manufactures in their shop design together with their retailers. As a result Starhill Gallery houses Jaeger Le Coultre the largest stand-alone watch boutique in the world.
Other watch brands that have the largest stand alone boutiques in the world in Starhill Gallery include Audemars Piquet and Ulysses Nardin of Switzerland, Graham of London and famed jeweller of Paris, Korloff which carries the world’s largest diamond!
It is indeed a coup to have attracted the global principal watch manufacturers and retailers to Starhill Gallery. The splendid design of these boutiques and the varieties of fine watch offered together with their big budget launching programmes like the latest Jaeger Le Coultre event, create a rich experience unique to Starhill Gallery. So was the launch for Audemars Piquet with their AP Femmes Du Monde Exhibition 2005 bringing along for their opening, renowned diva, Anggun.
Buyers of watches at Starhill Gallery are well-heeled collectors from Singapore, Brunei, Indonesia, the Middle East and the local rich. They comprise of regional and local royalties and celebrities and sports personalities like Juan Pablo Montoya.
JW Marriott Hotel has custom designed suites for these well heeled travellers and collectors. On top of that, all the fine watch retailers in Starhill Gallery have private rooms to ensure privacy for their clients. These demanding patrons insist on exclusivity, security and privacy. Starhill Gallery has provided all three.
Starhill Gallery is also a lifestyle destination. We have created a Pamper Floor of 50,000 square feet. It is twice the size of the world renowned Harrods Urban Spa Retreat in London. Already we have many well-heeled locals and also our hotel guests spending hours in the treatment rooms at the Pamper Floor.
The Feast Village
The Feast Village comprises of 13 upscale restaurants offering approximately 1000 seats of fine dining. It draws quality traffic and the initial sales since its soft opening have exceeded our expectations. On an annualised basis, the restaurants in Starhill Gallery can now expect to gross RM50 million in sales. This is indicative once again of high quality traffic.
We have actually designed a multi coloured ‘time tunnel’ and the meandering walks in the Feast Village as traffic bumps to slow down human traffic so that they can appreciate in wonderment, all the finest of details created by all the global iconic designers in this village.
This Feast Village also reflects a reminder to our patrons of living in a global village in transparency and harmony, appreciating the best of human endeavours in the field of design, culture and culinary excellence.
Ladies and gentlemen, a retail challenge is not an easy one, but in Malaysia the potential is there. Our retailers and mall owners must continue to excel and stay above the fray. We must follow the clarion call of our beloved Prime Minister YAB Dato’ Seri Abdullah Ahmad Badawi to be globally competitive in our approach and attitude.
The government’s policy and commitment of promoting Kuala Lumpur as a shopping haven is an important initiative. Many cities around the globe have to reinvent themselves of late to attract travellers.
One would have thought with technological advances in aviation, Dubai would be by passed as an intermediate pit stop to Europe from Asia. The magnificent way the people of Dubai have turned around their moribund fate is well documented. It has now become an oasis for European travellers for shopping and relaxation, even the likes of David Beckham own homes in the ‘desert’ of Dubai.
Hong Kong will soon open their Disneyland to the world complementing neighbours Macau, touted as the glitzy Las Vegas of Asia. Not to be outdone, the Singapore government has recently invited bids from casino operators around the world re-branding Singapore as a heaven for integrated resorts, in other words wholesome family entertainment.
Ladies and gentlemen, we have invested millions to revamp Bintang Walk and Starhill Gallery and I am pleased to note, so have many of our local, regional and global retailers in Starhill Gallery. We have all voted with our passion and with our purse because we believe in the great leadership of our Prime Minister and his team and also the Mayor of Kuala Lumpur in making KL a truly global city, a city that also thrives with a gallery of rich experiences.
On behalf of all the retailers here, I offer our gratitude to the government and City Hall in full. I pray that our Good Lord will continue to bless this beautiful country, the government and its people and I also pray for His mercy to shower His grace upon Starhill Gallery and cause His face to shine on Starhill.
Thank you very much and God bless you.
Speech delivered by Tan Sri (Dr) Francis Yeoh
Managing Director, YTL Corporation Berhad
at the Opening Ceremony of Starhill Gallery, Kuala Lumpur
on July 30 2005