No end to retailers' woes despite lower rentals

Monday 24th August, 2020

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WORK IN PROGRESS LL I a RS 3 'W S % -."a'wa' ";%'x i mW I No end to retailers' woes despite lower rentals ASMITA DEY New Delhi, August 23 IN EARLY JUNE, most landlords were reluctant to lower rentals orgiveretailersabreather.That meant many of the smaller shopswere out of business; Full Circle bookshop in tony Khan Market folded up.Today, they're relenting; those that run big malls or have space on High Streets havere-negotiated with tenants, moving to a revenuesharing agreement. Others B Expectations of Mall mamarc that S S F wm Some like Viviana Mall in Mi im aSi erill aval Artin PNP 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 maintenance charges. Some like Mumbai's Viviana Mall are still evaluating contracts on a case-to-case basis. CEO Manoj KAgarwal said most retailers are seeking rent concessions not just for the lockdown period but beyond that. | Continued on Page 6 No end to retallers 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 Dear 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,purchasesminimal. And unless the buying picks up meaningfully, retailerswillneed to offer more concessions. Despite having negotiated lowerrentals, Metro Brands has been forced to shut a few stores in malls and High Streets. We saw a slight pick up in sales before Eid 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 Shuhas 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 andis asking mall owners fora reductionin 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, itsalong journeyto last year's levels. High Street stores are recovering faster than malls, Bindra said. These numbers are at a variancewith those of the mall owners.A spokesperson for Mumbai-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, DLF 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.