Mumbai: Inorbit Malls (India) Pvt. Ltd, the mall division of Mumbai-based real estate developer K Raheja Group, is planning to launch luxury malls and discount malls. The company, which currently runs a mall in Mumbai’s western suburb of Malad, is creating two more formats, which could include the Inorbit name and a new sub-brand name.
“Details of the plan are in the drawing-board stage,” said Manoj Motta, associate vice-president (leasing) at Inorbit. “All our time and energy is currently going in to this venture.”
The number of malls, locations and investment involved have not been finalized yet. Industry executives predict that while the luxury malls could be in Mumbai, New Delhi, Bangalore and other large metros, the discount malls will be in tier-II cities.
Inorbit, which is among the largest malls in India, has been running since 2003. The company, whose Malad mall gets around one million visitors a month, will open malls in Navi Mumbai, Pune and Hyderabad this year.
In addition to Inorbit, K Raheja’s retail ventures include Shoppers’ Stop Ltd, the listed department store chain with several speciality store chains, and HyperCity Retail (India) Pvt. Ltd, a hypermarket.
“Factory outlets have been very successful in the United States and this is the right time to explore this option in India,” said Harminder Sahni, chief operating officer of Technopak, a New Delhi-based management consulting company.
Sahni noted that many brands and retailers were coming to India and that Technopak estimated “that this has meant that 10% of all merchandise, including clothing, remains unsold. So, although there is space for it, factory outlets here are not of the standard of European and US factory outlets.”
The Loot, run by Jay Retailing and Merchandising Pvt. Ltd, is the only factory outlet chain in India. It has 20 multi brand factory outlet stores nationally and is also planning large format stores, which could compete with Inorbit’s discount malls.
Several retailers have recently entered the Indian luxury market, which is growing at 20%, according to a 2006 study by Merrill Lynch and CapGemini.
Real estate developer DLF Ltd is constructing a luxury mall in New Delhi.
India’s largest listed retailer, Pantaloon Retail India Ltd, is also considering building a luxury mall in Mumbai and the Wadia Group, which runs textile company Bombay Dyeing, plans to develop 10 luxury malls in the next 10 years. Inorbit could also compete with group company Shoppers’ Stop’s planned multi-brand luxury retail chain, Verdi. But neither Shoppers’ Stop nor Inorbit have announced their plans yet.