NEW DELHI/BENGALURU: Large shopping malls, which have been feeling the pinch of a long lockdown, received another blow on Monday as several top retailers and restaurants refrained from opening outlets due to a deadlock over new rental agreements.
While some big mall owners, such as DLF, Nexus, Phoenix and Select City, have offered to waive 50% rent during the lockdown period, most of these determined retailers, which operate over 100 brands among them — including Levi’s, Bata, Tommy Hilfiger, Calvin Klein and Madura Garments — have demanded a full waiver.
They also want further restructuring of rent through revenue share and reduction in minimum guarantee for six-to-nine months. “We will continue to hold and not accept the 50% rent waiver during the lockdown, which the large mall groups are offering,” the retailers said in an internal communication among themselves. “We discussed that we should all be patient and hold for a week to two weeks if push comes to shove as the waiver gains are far higher than revenue upsides right now. Malls have climbed down from 0 to 50% and many may get to 75% to lure a few of us.”
Sources, however, said the ground reality was different as most of these malls from Nexus to Select saw 40-60% stores opening on the first day. Some of the brands that opened their doors, included Benetton, Reliance Brands, Zara, H&M and Starbucks. In Forum Mall, which retailers said had offered rent waiver upfront, all brands opened.
“We are reaching out to retailers individually to discuss and we are sure that as we open gradually, everybody will agree to open their stores,” said Pushpa Bector, executive director at DLF Malls. “We need to collaborate at this time and they (the retailers) are our partners.”
Over the next one-to-two weeks, these discussions are likely to flesh out the specific contours of the arrangements between mall owners and retailers. The retailers are expected to gather again on June 11 to discuss the options on the table. Meanwhile, at the capital’s iconic shopping destination Khan Market, a popular bookstore and a cafe, Full Circle and Cafe Turtle, downed shutters after talks with the market association fell through.
“The guidelines allowing restaurants to stay open only till 9 pm is a non-starter. So, it won’t move the needle for these outlets to start restaurants in large malls immediately,” said a top Mumbai-based restaurateur. Independent standalone landlords have shown better reaction to these negotiations.”
Amitabh Taneja, chairman, Shopping Centres Association of India (SCAI), said around 250 malls, out of 650 large ones (above 100,000 square feet) were open on Monday. “We are hoping more malls should open in the coming weeks as retailers and malls owners iron out their differences over commercial arrangement,” he said.