After a thirteen-year stay, branded apparel player Pantaloons, owned by Aditya Birla Group, will down its shutters at the High Street Phoenix, one of the largest shopping malls in India, from Monday to make way for Zara. Earlier, Big Bazaar, owned by Future Retail, had moved out of Phoenix in April last year to accommodate Swedish retailer Hennes & Mauritz.
While Zara already anchors Palladium, adjacent to High Street Phoenix, the new store will be twice as large as around 35,000 sq ft.
A senior official from the Pantaloon told FE, international brands were generating higher revenues and, therefore, being accorded preferential treatments in malls. With the closure of the High Street Phoenix store, Pantaloons will be left with 126 stores across the country. In the last one year, the company has shut three stores in Mumbai.
Most of the country’s malls today operate on a model where they pay a minimum rent and share revenues. According to Arvind Singhal, managing director at Technopak, international brands like H&M and Zara are able to attract footfalls and generate higher revenues, thanks to their designs and styles. “Ultimately, Zara and H&M, wherever they are present, are performing well in terms of sale,” Singhal said.
Rajneesh Mahajan, executive director, Inorbit Malls, said the same customer who used to shop at Lifestyle, Westside or Pantaloons now shops at Forever 21, Zara and H&M. “Revenues from these international brands are higher by 20% to 25% per sq ft compared to vanilla brands,” Mahajan said. Most global brands now have about six to a dozen stores.
You May Also Want To Watch:
Homegrown brands, on the other hand, have already expanded and have more than 100 stores. They are now right sizing stores. Most of the Pantaloons stores are of 15,000 sq ft to 20,000 sq ft and none of their stores is of 35,000 sq ft. So, they may be looking at a smaller store. Homegrown retail brands have been facing tough times in retaining their spots in top performing malls as a host of international brands are looking for quality real estate.
In the past one year, retail malls have had to jostle brands extensively in order to accommodate big ticket players such as H&M, GAP, Zara, among others. Mall developers have either relocate or resized stores of local brands who were erstwhile anchors.
In some cases, a more productive brand has ousted its competitor; GAP is believed to have taken up the space that was earlier occupied by Canadian shoes and accessory store, Aldo.
With international brands like Uniqlo, Zara Homes, Massimo Dutti, Ikea coming in and others like Zara, H&M, Forever 21, GAP expanding, demand for real estate is on the rise. Malls are signing on brands for shorter tenures so that re-working terms can be easier.
Armani replaced Satya Paul in Palladium, Adidas moved in where Reynolds once used to be. At the R-City mall, Globus made way for Hamleys. At Oberoi Mall, Burger King ousted Bombay Blues while Nike was allotted the collective space occupied by Neckties & More and Bombay High – both apparel brands. Earlier, H&M relocated Pantaloons and Food Bazaar in Delhi’s Select City Walk mall, GAP & H&M were ushered in to replace Jumbo Electronics and Benetton, among others, in Ambience Mall. GAP opened a 6,000-sq ft store in Oberoi Mall, Goregaon in Mumbai after ethnic wear brand Nalli shut their store.
At Infiniti Mall, Malad, GAP store is spread across 8,000 sq ft and has opened after Reliance Trend shut shop there.