Retail therapy? Ha!

Retail therapy? Ha!
By: Lavanya Srinivasan
Date: 2009-01-30

Bangalore:

In these times of recession, cost-conscious Bangaloreans are driving out big brands from city

Where have they gone?: Big malls now have far lesser footfalls. "Low customer inflow in many malls and locations is making it unviable for us to do business, so we thought it is better to close the stores. Besides, property prices have also gone up drastically," said Arun Devnani, chief executive officer of Globus. File pic
Big malls, where most Bangaloreans went on a pilgrimage every weekend, now have much lesser footfalls. Even branded stores are moving out leaving 50 to 90 per cent of the mall vacant.

At Eva Mall on Brigade Road, small retailers have shut shop and the mall owner is re-drafting sub-lease agreements with new tenants.

Purva Pavilion, on Church Street, has been half empty for the last four years and Sigma Mall, on Cunningham Road, has seen 50 per cent of the small stores moving out.

Plans on hold

Globus, the apparel retail chain group, has already closed two stores in Bangalore. The chain had planned to open 100 stores across the country since its launch. But now all its plans are on hold, given the high property costs.

"Low customer inflow in many malls and locations is making it unviable for us to do business, so we thought it is better to close the stores. Besides, property prices have also gone up drastically," said Arun Devnani, chief executive officer of Globus.

"Also we've shifted our base back to Chennai. When we shifted our base to Bangalore, it didn't work out well. Globus has done extremely well in Chennai and Mumbai," added Arun.

Rents up

Retail rentals at Brigade Road have risen 50 per cent in the past three or four years, taking the rental share of sales from 10-12 per cent to 40 per cent.

In the past two weeks, customer inflows have dipped by 8 to 10 per cent. "In the past seven to eight months we have not booked any new properties. We are waiting for property prices to come down. How can we pay all our sales as rentals?" said Brijesh Nadkarni of Spencers. He is also re-thinking about their plans to open more outlets in the city.

Kala Mandir, a Hyderabad-based retail store, which had shifted its base to Bangalore is also moving out. And for the same reason lower footfalls in the mall and high rentals charged by the developer.