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EWDPL offers retail space on revenue sharing basis

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Entertainment World Developers Pvt. Ltd. (EWDPL), the real estate developer, has said it will offer 1 million square feet of space in its 20 malls to manufacturers, regional brands and exporters to sell their products on a rent-free, revenue share basis.

The concept, named Treasure Showcase, will be offered in 13 malls of EWDPL and the malls developed by its partner firms Phoenix Mills and Big Apple. The malls have around 15,000 to 50,000 square feet of space for these manufacturers and brands and will charge anywhere between 4.5 per cent to 50 per cent of the sales of these brands, depending on the category, MD, EWDPL, Manish Kalani said.

The company expects around Rs 500 crore in revenues from Treasure Showcase and it would invest Rs 300 crore in creating and promoting the concept.

Among the 20 malls to be covered under the concept, three are already operational while 17 are under construction and will be completed by 2011. The malls are coming up in cities such as Bangalore, Chennai, Mohali, Jabalpur, Lucknow, Nanded, Raipur and Pune, among others.

“The idea is to enable more Indian products and brands to benefit from modern retail practices. In addition to being a new business model, it will also lead to an increase in footfalls, drawing consumers to malls,” says Kalani.

EWDPL has roped in franchise solutions company Franchise India to select the manufacturers and brands in the malls.

“It will give a good opportunity to manufacturers and exporters hit by the global recession to push their products locally,” says, Franchise India President Gaurav Marya.

Consultants have different opinions on the model.

“Revenue share is offered to those retailers or brands who can get more footfalls into malls. It works well if you have well-known brands. In case of no name brands, revenue share has to be larger as, if revenues are poor, the mall will suffer in getting income,” says Anand Raghuraman, partner and director, Boston Consulting Group.

Property consultancy Jones Lang LaSalle Meghraj’s Bappaditya Basu adds, “Most of the malls have some vacant spaces. With this model, the developer can earn additional money apart from utilising that space.”

Source: Business Standard

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