No end to retailers' woes despite lower rentals

Monday 24th August, 2020

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WORK IN PROGRESS L nn 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 orgiveretailersa breather. That meant many of the smaller shops were 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 have re-negotiated with tenants, moving to a revenuesharing agreement. Others mE Expectations of mall Mamaere that C ov un wm Some like Viviana Mall in Miirmbhai e#ill avialiiatin~ ~~An. 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. Somelike Mumbai's Viviana Mall are still evaluating contracts on a case-to-case basis. CEO Manoj KAgarwalsaid most retailers are seeking rent concessions not just for the lockdown period but beyond that. " Continved 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 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 Shu has been fortunateto get a rebate on rents at DLE 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 fora reduction in 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 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.