Marquee shopping malls in India are making their old anchor tenants move to smaller spaces to make way for new global entrants such as H&M and Gap in a bid to revive footfalls.
NEW DELHI | MUMBAI: Marquee shopping malls in India are making their old anchor tenants move to smaller spaces to make way for new global entrants such as H&M and Gap in a bid to revive footfalls amid rapidly rising popularity of online shopping in the country. Select Citywalk, one of the most popular malls in Delhi, for example, has relocated its once anchor tenant Pantaloons department store from its 20,000-sq ft space to an 8,000-sq ft space in the upper floor to make way for Swedish fashion retailer Hennes & Mauritz (H&M).
Since H&M wanted a 25,000-sq ft space, the mall at Saket also made Kishore Biyani’s Food Bazaar move out from the lower floor, two people familiar with the development told ET. Just about 10 km away, Ambience mall at Vasant Kunj is preparing to make space for H&M and US apparel major Gap by relocating Jumbo Electronics, Benetton and some other tenants, while in Mumbai’s Lower Parel area, High Street Phoenix mall is in discussions to relocate Big Bazaar as it is in talks with H&M and Gap, people familiar with the matter said. Both Gap and H&M plan to open their first shops in India this year.
A spokesperson for Select Citywalk confirmed that the mall is “in the process of clearing up some spaces” by relocating some brands and optimising the sizes of outlets. “The reason is to create spaces for new brands entering India to remain relevant in this ever evolving industry,” the person said declining to specify any brand coming to the mall. Deepti Goel, head of malls at Ambience, too, confirmed that its Vasant Kunj mall is realigning and restructuring space of its tenants, but declined to name any brand. Brands and real estate consultants estimate that only about two dozen malls out of the 200-odd operational malls in India that are successful and attract shoppers.
These marquee malls have been witnessing healthy yearon-year footfalls for the last several years. However, a slowing economy and the rise of online shopping among Indian consumers have started impacting their growth. Raj Singh Gehlot, MD at Ambience that runs two malls in the National Capital Region, said footfalls at its malls were growing by 30%-35% annually, but last year its Vasant Kunj mall saw the number of visitors dip by about 15%. The situation has improved this year, but still lags far behind the expected growth, he said.
To overcome this trend and continue attracting consumers in big numbers, prominent malls have started several initiatives such as boosting the experiential and services aspects with increased focus on food and entertainment, and by bringing in rare and newly sought-after brands. Now, prominent malls such as Inorbit and High Street Phoenix in Mumbai, Select Citywalk and Ambience in Delhi, and Forum in Bengaluru, hardly have any vacant space to accommodate the new global chic brands.
So, as they chase the likes of H&M and Gap, these marquee malls end up shunning some of yesteryears’ most sought-after brands such as Pantaloons and Big Bazaar. About three years ago, High Street Phoenix asked its once upon-a-time anchor Big Bazaar to prune its size from 50,000 sq ft to 40,000 sq ft so that the mall could accommodate brands like Kenneth Cole, Pavers England, Clarks and Accessorise. Now, according to three people familiar with the situation, the mall again plans to relocate Big Bazaar as it chases H&M and Gap. Future Group, that owns Big Bazaar, did not respond to an email seeking comments while Rajendra Kalkar, senior centre director for High Street Phoenix, declined to comment. Most international brands prefer popular shopping malls to open their shops in India mostly due to lack of quality high-street destinations. Gap has already said that it will skip high streets in India. (Source”http://retail.economictimes.indiatimes.com/news/food-entertainment/entertainment/malls-in-big-cities-ask-the-likes-of-pantaloons-big-bazaar-to-make-way-for-hennes-mauritz-gap/46390961)