No end to retailers' woes despite lower rentals

Monday 24th August, 2020

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No end to retailers woes despite lower rentals

ASMITA DEY
New Delhi, August 23

INEARLY JUNE, most landlords
were reluctant to lower rentals
orgiveretailersabreather.That
meant many of the smaller
shops were out of business; Full
Circle bookshop in tony Khan
Market folded up.Today, theyre
relenting; those that run big
malls or have space on High
Streets havere-negotiated with
tenants, moving to a revenue-
sharing agreement. Others

mn Some like Viviana Mall in
Mumbai still evaluating con-
tracts on case-to-case basis

wm DLF Retail has
given tenants a full
waiver on rentals for
the lockdown period

wm Expectations of
mall owners that
consumers would
soon flock back to
shops driving up sales
have been belied






ILLUSTRATION: ROHNIT PHORE

have lowered the rentals, DLF
Retail, for instance, has given
tenants a full waiver on rentals
for the lockdown period,
excluding common area main-
tenance charges.

Some like Mumbais Viviana
Mall are still evaluating con-
tracts on a case-to-case basis.
CEO Manoj KAgarwal said most
retailers are seeking rent con-
cessions not just for the lock-
down period but beyond that.

Continued on Page 6
No end to retailers woes despite lower rentals "On a per store basis, retailers have limited staff but malls employ a huge number of employees and we have had to bear the operational costs throughout. The discussions cannot be one-sided, Agarwal said. However, expectations of owners that consumers would soon flock back to shops driving up sales have been belied; footfallsare few,purchases minimal. And unless the buying picks up meaningtully,retailerswillneed to offer more concessions. Despite having negotiated lower rentals, Metro Brands has been forced to shut a few stores in malls and High Streets. We saw a slight pick up in sales before Fid and Raksha Bandhan and are hoping for more of this in the festive season, Aisha Malik, VP, e-commerce and marketing, told FE. Malik pointed out the negotiations with owners were a continuous process these days. Joe Shu has been fortunateto get a rebate on rents at DLF Promenade and as Jyoti Narula, founder, said more discounts could come through. With sales slow, Narula says keeping costs in check is critical. Biba has struck a revenueshare deal for its stores in malls and High Streets for the restof 2020 and is asking mall owners forareductionin CAM fees. The apparel retailer has been fortunate to close out agreements with 85% of its landlords. Siddharth Bindra, managing director, is hoping that charges, for agreements where minimum guarantee amounts are applicable, will see a substantial reduction laterin the year. Nonetheless, it'salongjourneytolastyear's levels. High Street stores are recovering faster than malls, Bindra said. These numbers are at avariancewith those of the mall owners.A spokesperson for Mum bai-based R City Mall, which re-commenced operations on August 5,said consumption levels are at 60% of pre-Covid levels. The company is still in discussion with its tenants for re-neogtiating rents. Pushpa Bector, ED, DLE Retail, told FE footfalls have been encouraging during the festive weekends across properties. DLF Promenade, for instance,saw footfalls of 18,000 during the Independence Day weekend.