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Indian malls ditch local brands

News, 19 August 2015

NEW DELHI: India's mall owners are taking steps to relocate local brands to less attractive locations or even evicting them as they look to free up prime retail space for global brands.

"We would rather have a Zara or a Mothercare as our anchor tenant that brings their full range in a 4,000-5000 sq ft than … multi-brand chains," Arjun Sharma, chairman of mall operator Select Group, told the Economic Times.

"Brands like Westside are slowly going away (from large malls) and they will get replaced by a Forever 21, H&M probably or a Zara," he added. "It is part of normal churn."

So far, however, this practice appears to be limited to major cities and chains such as Westside, Pantaloons, Shoppers Stop and Lifestyle are likely to find continued relevance in lower tier cities.

In the metros, however, malls are looking for ways to refresh their appeal and attract a younger demographic.

"We need to understand that the visitors' profile have been changing and aspirations are going up," explained Mukesh Kumar, vice-president at Infiniti Mall in Mumbai, who is shifting Reliance Trends from its current location in order to bring in fashion retailer Gap.

"The mall is basically a partnership between the customers coming to the mall and the retailer and if we do not change, they will start going to some other mall," he added. "The people coming to the mall want new brands so we have to keep evolving."

Shuffling the pack of brands available is within the power of the mall operator but location, design and layout are other factors that are harder to change and a recent report from property consultant JLL India highlighted the fact that many of the country's shopping malls are performing poorly.

Of 95 malls operating in Delhi-NCR, it said that just 12 could be described as successful.

Malls are also having to face up to the threat posed by ecommerce which is hitting footfall – another reason for spicing up their offer with global brands.

Data sourced from Economic Times; additional content by Warc staff