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Retailers book bulk space in malls for better rentals

By FashionUnited

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Several big retailers with a portfolio of top brands

under their belt are booking bulk spaces in malls to get a better deal on rentals. Arvind Brands, for instance, has decided to open at least 4-6 brand stores in any mall it chooses to rent to take the benefit of having brands such as Tommy Hilfiger, Gant etc in its portfolio.

Apparel retailers, who are already finding it hard to woo customers due to slow economy and low consumer buying sentiment coupled with high product cost owing to excise duty are finding rental costs too high. So they are looking for ways to keep their costs under check. Rentals are one of the largest cost components for any retailer at around 10-20 per cent of the revenue on an average, which has triggered newer ways to reduce it.

According to real estate consulting firm Cushman & Wakefield, five-star hotels across cities such as Mumbai, Delhi and Bangalore account for as much as 80-90 per cent of luxury retail space in the country. Footfalls have, however, been lower in hotels than in malls because most guests at hotels shop overseas. While malls and standalone luxury outlets have been a comparatively bigger draw. So apparel retailers are trying to take advantage of it.
Arvind
Tommy Hilfiger