Malls make space for high revenue earning brands

With FDI changing the rules of organised retail in India, and top global brands on the lookout for lucrative retail spaces, premium Indian malls are rushing in to capture their attention. Names like Zara, Armani, Forever21 or Uniqlo appeal

to the Indian audiences attracting higher per sq. ft. sales compared to departmental or hypermarket stores. And while brands are facing issues due to lack of good spaces on high streets and malls in India, existing premium malls are replacing or reducing the size of low revenue earning stores to accommodate foreign entrants.

For instance, late last year, when the licensee of British department store chain Debenhams changed ownership, it got an eviction notice from the Ambience Mall in Gurgaon that leased out the 20,000 sq. ft. space to Spanish apparel brand Zara. And with demand for space in malls like Select Citywalk in Delhi, Ambience Mall in Gurgaon, Inorbit Mall or High Street Phoenix in Mumbai on the rise, malls are rightsizing stores of existing brands or relocating them within the shopping premises to attract footfalls.

While Select Citywalk reduced the size of Levi’s store from 2,700 sq. ft. to 800 sq. ft. to bring in new brands like Superdry and Dune Shoes, Next London has shed about 1,000 sq. ft., helping the mall accommodate Apple. And at, Ambience Mall in Gurgaon, s.Oliver has cut down its space by 50 per cent and Guess will soon follow suit.

While on one hand right-sizing of stores to accommodate new brands is one step malls are taking, on the other, they are also completely oustering some low revenue earning ones and replacing them with the new entrants. While Phoenix Market City mall in Mumbai's Lower Parel area trimmed the size of the Big Bazaar hypermarket store from 50,000 sq. ft. to 40,000 sq. ft. to accommodate brands like Kenneth Cole, Pavers England and Clarks, and Accessorise. And when Esprit exited India late last year, Infiniti Mall in Mumbai's Andheri brought in Starbucks. Arvind Brands-run Energie is being replaced by Armani Jeans, and s.Oliver's 5,000-sq. ft. store is being replaced by Forever 21, which is also moving into the space vacated by Debenhams in Oberoi Mall in Mumbai.

Malls today also track performance of brands, apart from taking surveys asking customers what brands they would like to see in the mall. They are also taking into account the space occupied by a particular brand and total sales, it generates. With lot of well-known foreign labels eyeing entry in India, prominent malls in metros are stepping up strategies to attract them.