Malls bend retail rules to woo global luxury brands

It’s increasingly becoming difficult for the malls to attract footfall amid the low

consumer sentiment. However, some global brands like Zara continue to remain buoyant despite the lull among the brick and mortar retailers. No wonder, malls are going the extra mile to woo such labels by offering them space at their own terms and conditions. For instance, while Spanish brand Zara opened its first store in Delhi's Select Citywalk mall in 2010 by paying an advance security deposit for the space, things are not the same today. Now when Zara signs up a contract with a mall owner anywhere in the country, the latter not only agrees to revenue sharing model but also provides fit-outs and floorings.

The success of foreign labels like Zara, Mango, Promod and Aldo has given them an upper-hand over small retailers. The upcoming DLF Mall of India in Noida, for example, has given six-year lease to small shops and nine years for large and global players. Pacific Mall in west Delhi too has followed a similar strategy for different brands. So now, the Pacific Mall would provide short-term lease periods between five and six years to test less popular brands, however, brand like Forever 21, would get longer lease terms.

Establishments such as hypermarkets, multiplexes and international brands that are able to attract good number of visitors enjoy easier leasing terms, becoming the preferred retailers for most malls and in some cases, malls are also bending the rules if they desperately want a brand or retailer to open a shop under their roof. Mall owners are now awaiting the entry of H&M, GAP and Uniqlo, which would be given space on the ground floor to woo customers and become the next anchor stores for many.