Uniqlo in hunt for retail space in malls to enter Indian market

Japanese fashion retail company Uniqlo which is awaiting government nod to set up single brand retail stores in India has already started its search for retail space in leading malls for its India stores.
 

Uniqlo

Uniqlo has begun doing the ground work of identifying potential locations for their stores so that it doesn’t have to wait long  to start its India operations after approval from the Department of Industrial Policy and Promotion (DIPP).
 
The company is believed to be doing the rounds of leading malls in metro cities like Delhi, Mumbai, Kolkata, and Bengaluru to scout for retail space of over 20,000 sq ft for its flagship stores.
 
However, talks with mall owners and the brand have hit a roadblock due to differences in financial talks with malls refusing to give in to the demands of the brand and asking for minimum guarantee besides revenue sharing.
 
“Uniqlo is asking us for pure revenue sharing and we are not agreeing on it. We want an agreement with revenue sharing plus a minimum guarantee,” an anonymous Mall executive was quoted as saying by the Economic Times.
 
Quality retail space in India is proving to be a constraint for Uniqlo. It was expected to enter the Indian market in 2018, but decided to delay its India entry citing location issues to set up their stores. It remains to be seen whether Uniqlo gives in to the demands of mall owners or further delays its India entry.
 
A spokesperson for Uniqlo in Tokyo has said that all decisions with regards to India will be taken once the company receives the requisite permissions from the Indian government.

“We will be able to discuss potential future steps at a later date,” the spokesperson said told Economic Times. “We are confident that when the time comes, we will be able to reach mutually beneficial deals with all of our business partners."
 
Fast Retailing, parent firm of Uniqlo which posted net profit of $1.1 billion has identified India as an important market. The company will run a wholly-owned subsidiary and set up stores in India. It will compete for market share with other international fast fashion brands like Hennes and Mauritz (H&M) & Zara.

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