The swish Khan Market high street is increasingly becoming a destination for food and beverages service providers like restaurants and coffee shops and for other retailers with niche product lines
New Delhi – A host of foreign retailers are leaving Khan Market, once a much-coveted retail destination of global brands. Brands said high rentals in Khan Market—one of the toniest high streets in India—do not justify the sales they generate there.
Vero Moda has exited Khan Market. So has beauty store Mac and toy retailer Hamleys, over the last few months.
“Khan Market is losing (its) sheen because of high rentals,” said a top executive of a brand that has left Khan Market. “Premium brands are not making money because of high rents.”
A top executive of a global brand that has exited said the swish location is increasingly becoming a destination for food and beverages service providers like restaurants and coffee shops and for other retailers with niche product lines. Costa Coffee, for instance, is preparing to open an outlet there.
“Footfall for apparel is quite low. Also, rents have become highly non-sustainable,” the top executive said asking not to be named. “Hence (it) doesn’t make sense to run high street retail for apparel (there).”
Just before the Covid-19 pandemic hit in 2019, property consultant Cushman & Wakefield had placed the
Delhi’s upscale Khan Market in the list of world’s 20th most expensive retail locations in its report ‘Main Streets across the World 2019.’
Pankaj Renjhen, joint managing director for consultancy Anarock Retail, said various swanky high streets like Khan Market in New Delhi and Nariman Point in Mumbai have over the years “plateaued”, prompting brands to look for greener pastures.
“Productivities in these markets cannot go beyond a point. Their sales have plateaued and their catchments are not going to grow. Rather, they are moving out to the suburbs,” he said. “So, retailers are moving to other areas that would give them better return on their investments like Galleria Market in Gurgaon or to Bandra in Mumbai.”
Renjhen said even though rentals in Khan Market (Rs 700-1,000 per sq ft per month) and Galleria Market (Rs 500-1,000 per sq ft per month) in Gurgaon are comparable, the later provides better “opportunities” for retailers with its ever-expanding catchment.
However, not everyone is leaving Khan Market. UK-based Marks & Spencer said it will stay put in the south Delhi high street.
“The M&S Khan Market store is open for our customers and there are no plans to close the store,” an M&S spokesperson said. “With our fit –for-future program, we remain committed to the Indian market as we continue to invest in modernizing our current store estate and plan to open about six new stores (in the country) in the next six months.”