Retailers ask malls for rent reductions as stores remain closed
Many fashion and lifestyle retailers whose shops remain shut have asked for rent waivers and reductions in malls as retailers struggle amid halted cash flow.
As micro, small, and medium enterprises struggle to pay rent during the anti-coronavirus lockdown, even larger retailers are seeking assistance. Brands including Future Group, Reliance Retail, Sephora, Calvin Klein, Tommy Hilfiger, Arrow, and Arvind Lifestyle have asked mall operators for leniency with rent, three industry sources told ET Bureau.
Many fashion and lifestyle stores have been closed since before the lockdown. A number of states including Haryana and Tamil Nadu were swift to close down malls earlier in March as Covid-19 cases began to spread. Even in areas where malls remained open, sales were significantly down as consumers avoided crowded places.
Some grocery retailers are also asking for a reduction in rent as, even though they are allowed to remain open, they cannot sell their full product selection. Groceries and ‘essential goods’ often have lower profit margins, compared to other fast-moving consumer goods such as cosmetics.
“The industry needs support from everyone such as property landlords and the government,” said Kumar Rajagopalan, CEO of the Retailers Association of India, ET Bureau reported.
Rajagopalan also said that businesses may not be able to sustain paying staff members should they have to continue to pay rent which could lead to increased unemployment, something that is already becoming an issue across the country.
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