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Mall Manias: Big retail names have changed their strategies and pulled out of the malls


By Sumit Kumar, Section Mall Culture in Gurgaon
Posted on Mon Sep 22, 2008 at 12:32:24 AM EST

Faulty mall management coupled with inappropriate tenant mix has resulted in poor mall traffic and closure of individual stores in several malls. Already, a number of big retail names have changed their strategies and pulled out of the malls.

ETAM, the French lingerie brand, recently pulled out of Palm Beach Galleria mall in Navi Mumbai, together with six other retailers such as grocery chain Foodland Fresh and Manoranjan sarees. ETAM has so far closed four stores, all in malls, in cities such as Mumbai, Delhi, Surat and Ahmedabad.

Reebok has closed two of its five stores in the Great India Place in Gurgaon. Levi Strauss India, had also said earlier that it will be pulling out of a substantial number of malls in 2008.

"Once the store are leased out, the developers are not worried about the promotion any more. Though a few mall organise some in-house promotional activities but that alone doesn't gurantee a good footfall. Customers will get to know about the in-house promotions only when they come to the mall," says a retailer that has multi-brand store in The Great India Place.

A lot of brands have recently walked out of mall owing to decreasing footfalls. Experts feel that the developers have not paid enough attention to the mall management aspect of retail.

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"Thinking about the efficiency of mall now is like thinking about the fuel efficiency of the car after its launched. Majority of the developers have done nothing about the branding, marketing, budgeting, financing part of running a mall. This is hurting the efficiency resulting in set back in the main business," says Rajneesh Mahajan national head-retail services Cushman and Wakefield.

India's retail industry thrived due to the rise in shopping malls across the country in the past five-six years even as their management has emerged as a big challenge.

"Mall management is the biggest concern of the retail industry today. This is one area which has been neglected time again, either by the real estate developers or by the retailers," says a Mumbai based retail expert.

Contending the responsibility of proper management of a shopping mall is often shrugged off by builders. "Once the novelty of a shopping mall wears out, there is an urgent need of engaging the customers in promotional activities. But they should not be sporadic rather should be well spread out and customised keeping the clientele in mind. The retailers are treated as cash cows instead of being considered an integral part of mall. We decide the locations keeping all this in mind and this has limited our expansion plans," says Amit Rai business head of Oliver, an apparel brand.

There is a lot to be desired from the mall developers in India, says Wong Kok Wing, a mall management veteran in Singapore and south east Asian countries.

"The developers have started spending money but it is not being spent in the right direction. Malls were constructed keeping the demand in mind but what the customers want was not considered, leading to this problem. India will have to learn from the other Asian countries," he adds.

Source: Economic Times, Sep-21-2008

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