Tamil Nadu

Retailers in malls want businesses to reopen

International brands and retailers housed in malls across Tamil Nadu are sitting on a huge pile of unsold inventory and facing mounting losses owing to the COVID-19 pandemic. They have requested Chief Minister Edappadi K. Palaniswami to permit a phased re-opening of shops. Retailers say that if they are not allowed to operate, many of them will have to wind up their businesses. Employees working for these retailers and brands have taken huge salary cuts and if the businesses do not resume they may have to face job losses.

“I have consignments worth several crore in my shop at a mall. Though the mall owner has given us several concessions during the last three months, our business is not going to revive any time soon,” says the proprietor of a clothing brand that specialises in weddings. “Once the malls open, I have decided to sell off the clothes at a discount and move out to a different premises for a lesser rent.”

The Chief Marketing Officer of another national clothing brand says, “We have moved some of our consignments to our shops which are on local high streets. But our employees (over 50 of them) are waiting for the malls to re-open. With no businesses, they had to take a salary cut of 8-15%.” Over 13 different retailers whom The Hindu spoke to said that with no work, their employees were getting worried and restless day by day.

There are over 25 malls in Tamil Nadu employing over 45,000 people directly and indirectly. According to information provided by real estate services firm Jones Lang LaSalle (JLL), there are five major malls in Chennai — Express Avenue (1mn sq. ft.), Phoenix Market City (1.05mn sq. ft.), VR Chennai (0.95mn sq. ft.), Forum Vijaya (0.64mn sq. ft.) and Marina Mall (0.55mn sq. ft.). There are eight neighbourhood malls, including Ampa Skywalk (0.3mn sq. ft.), Citi Centre (0.2mn sq. ft.) and Spencer Plaza (0.6mn sq. ft.). There are also malls in tier-II cities such as Coimbatore and Madurai. According to the data given by the Shopping Centres Association of India, shopping centres across Tamil Nadu generate an annual consumption turnover of ₹15,000 crore. They contribute over ₹1,300 crore to the State exchequer through the GST and other levies.

The proprietor of a leather brand says the government should at least allow alternate shops within the malls to operate on each day. “A total closure of over four months is a huge blow to businessmen as well as their employees,” he argues. A retailer says: “If we are not given permission to resume business, my anchor client wants to move out of the mall. If he winds up, I will also have to wind up.” A few retailers who are in the hypermarket space and clothing space have cashed in on the online trend. They have sold online and delivered the consignments through delivery apps. An official from a hypermarket in one of the malls says, “We managed to clear most of our consignments online.”

Those running the mall businesses are making all efforts to reach out to the government with a plea to allow them to re-open. While some have given rental waivers and concessions for their tenants, the others have asked for time to see how the economy revives. They have even permitted shop-owners to visit the mall at frequent intervals to inspect their stores and stocks. Permission has also been given to take out stocks which cannot be kept idle for long. “Malls have opened in other States, so we request the government to study the trends and patterns there and give us permission,” says the marketing head of a city mall. “We have requested the government to give us the opportunity to start operating in a controlled manner and help the industry’s revival. We are looking forward to the government allowing us to operate,” says Pooja Patti, Centre Director of Phoenix MarketCity & Palladium Chennai. Munish Khanna, Chief Revenue Officer, Express Avenue Mall, says, “We have made multiple representations to the government to allow the malls to operate as we have a stringent SOP in place to operate the malls in a safe and secure manner.” Both Mr. Munish and Ms. Patti say they have put together a set of well-defined standard operating procedures for the welfare of employees and customers.

“Malls would be safer for the consumer when compared with a local high street market,” says Ampa Palaniappan, managing director, Ampa Housing Development Private Limited and promoter of Ampa Skywalk. V. Muhammed Ali, COO of Forum Mall, Prestige Group, says rental waivers were given to tenants during the lockdown and now the group is hoping that the government will allow malls to operate. Mall owners point out that only focussed shoppers will walk in and there will not be any unnecessary crowding. “If you look at the trend in other States after malls re-opened, the footfall is less but there is a 100% business conversion,” Mr. Ali notes.

Most retailers have indicated that if the situation continues they will not be able to pay salaries and clear their loans, and many malls could go vacant in the coming days.

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Printable version | Sep 22, 2020 9:26:03 PM | https://www.thehindu.com/news/national/tamil-nadu/retailers-in-malls-want-businesses-to-re-open/article32272525.ece

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