The world’s top fashion brands all want to be in India but a shortage of upmarket locations is forcing them to settle for malls that are second-best. When fashion major GAP debuts in Mumbai in February next year, it will be at the K Raheja-owned Infiniti Mall in Malad and the Oberoi Mall, both in the city’s northern suburbs. Ideally, the American firm would have wanted to be in south or central Mumbai — High Street Phoenix — but GAP wasn’t able to negotiate space in time because the mall is more than 90% full. Accommodating GAP would have meant reworking leases with other brands.
Nevertheless, GAP is keeping its fingers crossed because with brands such as Uniqlo, Massimo Dutti and Top Shop waiting in the wings, there’s going to be more jostling for space; H&M, which was originally expected to open its Mumbai store in December, is yet to lock into a deal.
The $16.5-billion GAP must risk losing out on a big-bang opening — its debut in Delhi’s Select City Walk, arguably the country’s leading mall, fetched it a reported R23 lakh in the opening month. In Mumbai, only High Street Phoenix and Palladium can deliver numbers close to that. One industry expert estimates the Oberoi and Infiniti malls will deliver about 40% less than their upscale peers.
That said, the suburbs are hotbeds for new residential projects and will boost business at malls.
* Overall mall vacancy rate 20%, with top malls operating at nearly full capacity: JLL India
* GAP to enter Mumbai in February 2016
* H&M still unable to lock real estate in Mumbai
Mukesh Kumar, vice-president at Infiniti, points out that Forever 21 also started out from Infiniti and is doing well. “The demographics of our mall is different from that in south Mumbai because the crowd is very young and has a flair for fast fashion,” Kumar said.
With top global brands moving into India, top mall developers are negotiating hard with existing clients so as to be able to accommodate companies such as Zara, H&M, Forever 21 and GAP. Store sizes are being trimmed, shops relocated within the mall and some brands are even being compensated to move out.
Mall vacancies, across the country, stood at nearly 20% last year, with nothing new being built in micro markets like south and central Mumbai. The top 10 malls are more than 90% full but a large number is more than 50% empty. Nirzar Jain, vice-president at Oberoi Mall, said it is impossible to accommodate retailers immediately. “They sometimes need wait for a year and more ,” Jain said. Pankaj Renjhen, director of retail at JLL India, said that while retailers do prefer a top mall, whether in Mumbai or Delhi, some have to move to the suburbs. “Some have preferred to open in a less than perfect location rather than wait indefinitely,” Renjhen added.