Sunday, August 19, 2018

Can Malls resurrect?

I went to a once-upon-a-time popular Mall in Chennai a week back – to watch a movie at Inox. I went 10 mins before the show began; during the intermission, I bought a Samosa and Tea for Rs. 200 and left the venue just after the film ended. There was nothing for me in the mall to hang around. No coffee shops, interesting retail concepts, a poorly scattered food court and absolutely uninteresting Mall Management. The toilet was a saving grace, neat and clean as always. 


Chennai Citi Centre was one of the earliest new-age Malls in Chennai which opened almost a decade back. Compared to the previously popular and hugely successful Spencer’s Plaza, Citi Centre managed by the ETA Group preferred to lease retail spaces as against selling them like Spencer’s. The initial euphoria was huge – located on RK Salai leading to the world-famous Marina Beach and the road being used by two former Chief Ministers of Tamil Nadu viz., Dr. Karunanidhi and Dr. J Jayalalitha for their daily commute. The road was in its best form all these years with Traffic Police stationed all day and night as well as reasonably safe. The Mall opened with Chenai’s iconic Landmark Store, Lifestyle and Inox as anchors followed by Foodworld, Mc Donalds & KFC in the food court and roof top; a slew of national and international brands followed. The “Marina” food court had some interesting concepts offering a range of food and beverage options. Café Coffee Day was conspicuously missing inside. Instead, CCD opened a café right opposite the Mall which continues to be a crowd puller. The Atrium would be used for interesting events and activities.

A few years in to it’s bull run, Express Avenue Mall opened 3 kms away, followed by Phoenix Market City two years back. With a spread of no more than 2 lakh sq.ft for Retail and F&B, Inox Cinemas spread over 30,000 sft, private Office spaces spread over 20,00 sft. and two levels of basement Car Parking, the Mall had little to offer in terms of retail space. As always, Small is Beautiful. Plus, it had a great locational advantage. But the Mall Management let the mall die a slow death for reasons best known to them. Almost all the original Retailers have vacated but for Basics Life and Giordano apart from Lifestyle and Inox. I approached the Mall Management two years back and suggested we could do wonders with what we have on hand and give a run for money due to its locational advantage and easy access to South Madras. They refused to oblige and have remained adamant on letting the opportunity pass by. Even now, the mall is sitting on a gold mine, if only one could take a serious look at what could be done to make it great, once again. 


Citi Centre is not an isolated case. During the Mall boom in India between 2006 – 2012, about 800 Malls of all shapes and sizes were operational at its peak across India’s Top 50 cities & towns. Thanks to a slowing economy since 2013 onwards, uncertain consumer sentiment and tough business conditions, more than half of them have shut down or have morphed in to Office spaces. A recent research report suggested that the Mall vacancies have improved off late and over 80 Malls are expected to open in the next 24 months across India. As we speak about this, VR Chennai opened its doors to the city just a month ago, spread over a million sft. 

So what happens to these Malls which do not get the desired traffic (of customers) anymore? Many people compare this situation to the Ghost Malls in the US, which I believe is not fair. The Indian Economy continues to show strong signs but for some shortfalls here and there. Older Malls can be resurrected, if only the Mall Owners prefer to do so. In our country where most of the Malls are owned by Real Estate companies, their only focus is generating a certain “revenue” per sft. Taking an extra mile to get consumers walking in regularly and keeping them hooked – this is no rocket science. Can be done pretty easily at much lower costs with very minimal efforts. Add to this, inefficient Management Teams in many cases who have never worked earlier in Malls or have a deeper understanding of Retail dynamics. Just that the Mall Owners must come out of their slumber and their fixation for a certain “fixed” revenue model and consider Professional Management. Malls are community centers and Mall owners must connect with the consumers and not just their bank a/cs.
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