| Expanding retail chains are fast abandoning malls to set up stand-alone stores.
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| At first glance, Bollywood actor Fardeen Khan and model Katrina Kaif appear to be walking down the pristine white ramp at apparel maker Acme Clothing’s Provogue studio in Mumbai’s suburban Inorbit Mall. Step in and it is obvious that these are lifesize posters in Provogue’s fifty-seventh store. Over three years, Acme has chalked up an expansion blueprint to encompass both high streets and upcoming malls.
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| Delhi’s Corner Bookstore Company already has 39 stores in 12 cities. This fiscal end, the tally will go up to 100. And by the end of this decade, it will have 600 Corner Bookstores across the country.
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| Simliarly, Belgique Chocolates is on the fast track, hitting high street locations for small outlets where it wants people to come in for targeted sales, especially from impulse buyers. It also hopes to expand its brand to cookies which it will retail at its own stores (and distribute from select grocery stores at upmaket locations).
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| Having tasted blood, retail stores like these are charting out scorching expansion plans. But this time, the locations are being cherrypicked. For instance, if they made a beeline for malls earlier, they are now looking at stand-alone stores on high streets and other vantage locations.
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| “We prefer to be on the high street, catering first to a catchment and then the entire city. It offers great visibility,” says the marketing head of a recently set up multinational clothes store in Mumbai.
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| Instead of pitching its tent in the plethora of malls mushrooming in the city, the American store settled for a suburban high street to flag off its Indian enterprise.
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| Even as it plans to move to select high profile malls, its penetration strategy is hinged largely on stand-alone stores. “It may be good for your image, but being an anchor store in a mall is not necessarily going to translate into sales,” he adds.
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| Increasingly, small and big retail chains are stepping out of larger venues to locations they believe are more suited to their product categories and target audience.
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| Take the Corner Bookstore, where publishing house Popular Prakashan has picked up a stake. With an average area of 200 sq ft, the book store is spread across locations like Barista to petrol pumps and is now settling in the neighbourhood. More than half its new offerings are likely to be stand-alone stores.
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| “We have realised that books are not a premeditated purchase. Being an impulse buy, malls do not provide the right environment as they are high intensity, high movement venues,” says Aalok Wadhwa, chief executive officer of the store.
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| So where is it moving? To friendly neighbourhoods and colonies. “These become like addas,” adds Wadhwa, who dismisses any ambitions of becoming a destination store like Shopper’s Stop’s Crossword.
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| With 3,000 titles, the Corner Bookstore claims its sales are due to customisation. Like in colonies, the store stocks books on self improvement, childrens’ books, cookery and other paraphernalia.
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| With an average of 25 people walking in every day, half of these are converted into sales, reveals Wadhwa.
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| What’s more, with a small format, the stores pay low rentals; have sometimes just one person manning the store; and overheads are minimal (few light points, one to two air-conditioners, common toilet facilities), which allows them to hit breakevens fairly early, often between six-nine months, and report profits before the end of the second year.
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| “If a location is not performing,” says Wadhwa, “we’re ruthless about abandoning it and moving on. We don’t have an emotional attachment to any store.”
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| But sales aren’t the only thing that is driving Vrinda Rajgarhia’s Sweet World. Unlike many retail chains, Sweet World wants to consolidate its presence even more in malls. Launched three years ago, this candy and confectionery store wants to reach out to more people. With 12 outlets at present, there are plans to add 28 more stores.
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| “We are going the mall route where there are guaranteed footfalls,” says Rajgarhia. In fact, she has relocated some of her high street stand-alone outlets to position Sweet World in malls.
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| Being edible products, power and hygiene are the prerequisites for Sweet World. And the promoter claims that malls provide the right environment. If she is looking at stand-alone stores and high street outlets, it is in smaller towns where malls are yet to make an appearance.
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| With a ticket size or a minimum purchase of Rs 60, she claims she needs a lot more people to clock sales. With revenues of Rs 4 crore currently, Sweet World hopes to have a buffet of 100 stores by 2007. “We can’t just afford to cater to catchment areas; we have to be a destination store,” adds Rajgarhia.
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| That’s also one of the reasons why even Provogue plans to open 12 more exclusive showrooms. Having established the brand, it now wants to be seen as a lifestyle store promo ting toiletries, leather goods and footwear. Aimed at the upwardly mobile achiever, it wants to be cool and with it.
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| One of the first malls in Mumbai to have come up a couple of years ago has been witnessing a churn. For what was considered to be a one-stop destination for high-profile foreign brands, most of them have today walked out to set up shop on high streets.
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| Today, even as footfalls are declining, conversions remain only a fraction. The management, however, is working overtime to host events to attract people. And while its food courts have been banished, the mall is a far cry from the hype and hoopla surrounding its launch.
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| Mall owners are not particularly perturbed by such movements. They claim that for every Corner Bookstore that walks out, there’s a Sweet World that makes the deal mouthwatering. “It is all a matter of having the right mix of stores,” says Govind Shrikhande, chief operating officer of Shopper’s Stop. |
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