SA's malls urged to ride the cart to better performance
Posted On Monday, 20 October 2003 02:00 Published by eProperty News
MALLS could substantially boost trading densities and merchandise mix by introducing programmes with small speciality traders on short-term leases, says Michelle Clarke, head of the speciality retail and leasing division of Old Mutual Properties.
MALLS could substantially boost trading densities and merchandise mix by introducing programmes with small speciality traders on short-term leases, says Michelle Clarke, head of the speciality retail and leasing division of Old Mutual Properties.
A programme that includes temporary units, a mixture of carts and kiosks, in walkways, vacant stores, parking and peripheral areas can provide low risk, high exposure opportunities for speciality retailers, she says.
Their tenancy by retailers specialising in product themes can bring an additional merchandise mix to the venue and to shoppers.
Clarke says the impact of such a programme can be gauged from the fact that R1.5 million is expected to be spent in December on products sold from carts and kiosks at Menlyn Park, Pretoria, the best-performing centre in Old Mutual Properties' retail portfolio.
Average monthly spend on speciality units at Menlyn is R750 000, she says. The introduction of speciality retail programmes is growing in other markets, according to Clarke. Almost all malls in the US run speciality retail programmes offering a variety of carts, kiosks and temporary structures for short-term lease.
These malls work with a speciality leasing manager, who controls the programme and introduces new speciality retailers, ensuring that the merchandise mix remains fresh and trendy.
She says the UK has embarked on a national speciality retail programme, spearheaded by London-based Retail Profile.
In Indonesia, property law now dictates that 20% of the gross lettable area of any retail venue must be leased to informal vendors. Clarke's division has set up programmes at five centres in the Old Mutual Properties portfolio.
These range from 31 carts at Menlyn to eight carts and two kiosks at Cavendish Square. She cautions that the installation of retail merchandising units and their tenancy without an experienced managing agent will result in degradation of the common walkways of a centre.
The speciality retail leasing division of Old Mutual Properties has a common-area protection policy meant to ensure themes are not competitive and product offerings are unique, she says.
"An on-site manager from our division ensures full compliance with house rules and also manages the specialty retail debtors book. A head lease rental is paid to the property owner on the first of each month. This is a direct return on investment to the property owner for the purchase and installation of custom-designed retail merchandising units." Clarke says the limited availability of sites in South Africa's shopping centres is frustrating some operators.
"We have a database of 50 local owner/operators, over 140 local potential speciality retailers and dozens of foreign turnkey operators looking to expand their concepts into the lucrative South African market.
They are looking for new opportunities, but are hamstrung." She cites the case of Nicole Gershanov, who started her retail career at upmarket Natal fleamarkets. Her first cart concept was Teen Accessories.
She established herself as a trendsetter and in 2001 opened her second cart, Rare Earth, specialising in collectable crystals. Her third cart of beaded originals is focused on the growing tourist market.
Gershanov has no intention of opening an in-line store.
Publisher: Weekend Argus
Source: Weekend Argus
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