Indian retailers with stores in shopping malls are threatening to close shop if landlords do not meet demands for waivers and new rental agreements.
Retailers representing 350 brands are seeking relief from tough rental commitments in the likely face of 12 months of low business driven by the Covid-19 crisis, proposing new arrangements such as revenue-sharing models. The brands have sent an ultimatum to malls including DLF, Ambience, Nexus, Pacific, Phoenix Group, Oberoi, and Mantri following the failure of some retailers to revise rental agreements.
“We cannot survive without collaboration,” said Future Retail MD Rakesh Biyani in a Times of India report. “If not, there will be further job losses in the sector.”
Of all Indian retailers, those that could be hardest hit by continuing patterns of buying this year are likely to be apparel and fashion.
“Retailers and brands have to additionally deal with massive accumulation of inventories, unprecedented disruption in manufacturing and supply chain, and the huge shift of customers to e-commerce, among other things,” read the retailers’ ultimatum.
Indian mall footfall is expected by some industry observers to continue to be affected by the Covid-19 pandemic well after the outbreak resolves, with consumer behavior potentially permanently gravitating towards online shopping.