Brands scouting for low rentals to beat the slowdown blues

Though western countries are showing early

signs of recovery, apparel retailers and brands in India continue to reel under pressure. To beat the slowdown impact, they are now opting for areas with low rentals, while giving up their existing high-street localities.

With key destinations like Mumbai's Linking Road, Delhi's South Extension and Bangalore's Brigade Road witnessing a hike in rentals by 13-18 percent in the first half of 2013, and some other destinations witnessing infrastructure development projects and traffic congestion, many brands have preferred moving to malls where developers are rather offering lucrative discounts on rentals and other schemes. Certain operational costs like electricity are also commonly shared in the malls.

Of late, the market has witnessed brands like Reebok, United Colors of Benetton, Reliance Trends, Puma and Pavers England etc, moving to low rental areas or evolving shopping locations and malls. Though most of the players have seen positive first half of 2013 owing to extended and heavy discount season and good festive season, industry fears that sales may further drop in coming quarters.