In March last year, Gitanjali Group announced plans to enter the luxury retail market with Luxury Connexions and Luxury Malls. The company promised to offer a one-stop-shop for worldclass fashion, jewellery and wedding products. Much has happened since then. The global economic scenario as well as that in the country has changed. What is also undergoing change is the realty market. Kunal Majumder speaks to Mehul Choksi, chairman and MD, Gitanjali Group on their mall plan.
Q: Why did Gitanjali decide on entering the luxury retailing segment?
A: India has been an emerging economy growing at a satisfactory level. Hence the luxury industry is also growing. We thought of taking advantage of this and entered the market to gain a sizable share.
Q: By when can we expect the first luxury mall from Gitanjali Group?
A: The firstly mall comes up at Hyderabad which would start during early Jan 2009 with a carpet size of 1,25,000 sq ft. We would have a majority of jewellery brands across the country under one roof and also it would supplement the leather accessories and handicraft products. This would give ample opportunity for manufacturers to showcase their product range. Our second mall at Kolkata, which is again a luxury mall, is expected to be up next year. The carpet area of the mall would be about 1,50,000 sq ft.
Q: What is the investment like?
A: The investment will approximately be Rs 250 crore.
Q: How many brands will the malls house? Would you also retail other luxury products in the fashion and lifestyle segment apart from jewellery?
A: Our mall will be home to all the luxury brands possible. About 100 and above brands or more. Apart from all the brands under Gitanjali, the mall will offer a mix of both domestic and international brands. At present we have tied up with Morellato Watches, Mariell Burhani, Rosata, Facco, Roberto Cavalli, Calgaro Jewellery and many more.
Q: What are the design themes of the malls? Who are the architects of the malls?
A: Both the malls are based on different themes. The Hyderabad mall is contemporary Indo-Islamic, while mall in Kolkata mall has a Colonial-Venetian Renaissance style. As for the architecture companies, for Hyderabad it is Arnoldlim from Malaysia and for Kolkata is it Pace Consultant.
Q: The look and visual feel of most of the Indian malls is inspired from international malls. Do you think it works for the Indian shoppers? How important is it to be innovative and fresh, to appeal to them?
A: Yes it works sometimes…but even for our malls we have adopted certain innovations.
Q: Most of the luxury brands in the country complain that lack of retail space and
high rentals hinder the prospects of growth and development. What is your take on this?
A: It is true to a certain extent, but India is a country which is evolving in terms of retail and it would take some time for the industry to mature.
Q: As a mall developer, how do you see the progress of luxury retail in India? What are the obstacles in terms of FDI and government support?
A: Frankly, it is very early to comment on this issue. The Indian government has been supportive to a large extent
Q: How much do you think has the Indian consumer matured to the concept of luxury?
A: The consumer is already aware of various luxury brands and the industry is growing in our country as we generally tend to follow the West in fashion and luxury.
Q: Do you agree with the opinion that in the near future, the number of malls in the country would exceed the demand? What should mall developers do to improve the situation?
A: Keep up the innovation and drive the footfall by attractive promotion is the only way to be ahead in the competition.
Q: Which other cities would you launch your malls? What are the factors for selecting these cities? By when can we expect these malls to come up?
A: At the moment we are not thinking of any other mall but in the future we can target some cities like Pune, Surat and many more.
Q: In the face of the ongoing economic slump in the country, how has it affected your business? Have your deadlines been postponed?
A: Yes to some extent
Q: Retail rents are misappropriate to income that retailers/brand generate. Kindly give your comments. Pls suggest five steps on how brands/retailers/developers can work together to counter the escalating rentals.
1. To have anchor stores at all levels of the mall
2. To ensure the spread of brand is in a systematic manner
3. To have the proper positioning of brands in the malls
4. To ensure footfalls in the mall and
5. To have periodic reviews with all tenants, and after getting the feedback decide on short and long term business strategies.
Q: If, as a developer, the assured minimum footfall goes down, would you support the brand/retailer?
A: Our basic interest is to ensure required footfall and we can always suggest steps to increase the footfall with our retailer.
Q: How do you see the business evolving in the next couple of months and by 2010-2011?
A: It is a testing time for all of us here in the next two years. But we certainly expect some positive moves by the government to support the economy.