WIN-WIN FORMULA Realty Bites: Brands Let Mall Owners Don Franchisee Cloak Brand owners tie up with malls in Mumbai and New Delhi to escape high rentals that otherwise take away a chunk of their profits Some prominent shopping malls in the country are now running franchisee stores for various brands in a win-win at a time when popular malls have become costly for most retailers looking to cut costs in a slowdown.In December,for example,Select Citywalk mall in Delhi signed as a store franchisee of US Polo Association apparel brand,buoyed by its successful experiment of franchising Tommy Hilfiger brand.And since then,the mall has expanded its franchisee business by getting into deals with Chanel and Sunglass Hut.High Street Phoenix Mall in Mumbai has been for years running franchisee stores of US apparel brands Calvin Klein and Tommy Hilfiger.This way the mall is making more money and there is nothing wrong in it, Rajendra Kalkar,senior director of the mall in Lower Parel said.Not many mall operators are treading this path though.Mukesh Kumar,vice-president of Infiniti Mall in Mumbai,said he was surprised that some mall owners are taking franchisees of brands in the malls they are running.I have never heard anything like that happening in India, he said.If somebody sees a profit by doing that then why not Its not a bad idea. Kumar said his companys core competency is in managing mall,but added that retailing is a related business.Some other mall operators,however,said their job is to develop and manage malls and retailing is best left to pure retail players.Anupam Yog,marketing director of Virtuous Retail,which runs malls in various cities,says,We create experiences and support the retail ecosystem in the mall and we dont believe its the job of the developer to get into actual retailing. Even some retailers frown upon malls that are undertaking retailing themselves.Personally I will not appoint any mall owner as my franchisee and my answer will be clearly no, says the chief executive of a fashion retail firm.Why would you make your landlord your franchisee The head of a retail firm alleged that some prominent malls in India are misusing their position by arm twisting some brands to become their franchisees.
Posted on: Tue, 03 Sep 2013 08:29:59 +0000
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