Mill to Mall: Rising from the ashes!

In the late nineties India’s first mall, Crossroads opened within a distance of five kilometers with fanfare where the mill premises in Parel, Mumbai was struggling to become a shopping and entertainment centre. The textile manufacturing business dwindled with time after going through its revolution in the early seventies and it was time to realize returns by deploying the factory space for retailing. The mill-turned-mall had a bowling alley when the sport was very new to Indian customers. The game was introduced to many neighbouring offices as a corporate sport, much like the five-a-side football game that was introduced a score years ago to companies in Bangalore for conducting inter-company tournaments during week-ends, to see that footfalls are maintained. When the state-of-the-art mall in the neighbourhood opened, many in the industry opined that the death knell has tolled for the mill premises and its desire to become a successful mall has ended as a far-fetched dream. Perseverance paid at the end of it all. The Phoenix mill at Parel has not only emerged as a mall but it has proved to be a successful model for scaling up with its progressively extended formats. The Phoenix Market City mall is today a brand to recon with, in the industry characterized by its multi-locational rollout.

Phoenix inherently had a lot of inadequacies though. The location was considered a low profile one which only allowed narrow access to the newly mill-turned-mall. The premise was an open one with a towering mill chimney that yet stands testimony to the fact that it was a mill once upon a time! There were no takers initially until a few anchor store organizations tried to bargain their own de-risking by taking up space facing the main Tulsi Pipe Road so that even if the mall would fail, these stores may have their captive footfalls from the high street side. The mall began to ‘rock’ and space utilization became very efficient as days went by. The extended part of the mall is appropriately targeted as a premium and luxury retail mix, christened ‘Palladium”.

The younger generation of people managing the mall from the family ownership team did not have any pre-earned experience of operating a mall but they had a good deal of experience as legacy in managing a mill. They learnt the ropes of managing the new business with a 100% commitment to make it a huge success. There was no big professional name to run the business initially, though a few came in later and even now there is no big professional name that one can recollect or one can mention as someone who led the business to meet with success. The ownership team Atul and Gayatri did it all, with its strength and perseverance. The immediate vision of the business was to turn the mill space around into a productive mall space for some financial returns. But the entire business was perceived with a visionary perspective to establish the mall brands as something significant to roll out across India in future.

Galleria in Hiranandani Powai and Spencers in Chennai are the first few 'malls' made in India in the mid nineties. Both have a very clear real estate returns based business accountability. Space ownership is a diluted multiple, as many people own retail spaces in these malls. The tenant mix has undergone frequent changes in the past as ownership and tenancy agreements changed. Malls were then known to have smaller unit spaces as otherwise occupancy gaps were feared. These spaces today maintain status quo in terms of their small unit formats as multiple ownership may render it difficult to do any kind of redevelopment. The Haiko mall in Powai, Mumbai has undergone a few significant changes in the last decade to bring it to what it is today. The Powai surroundings have become clean and accessible and hence the new high streets within Hiranandani Gardens and the malls have been doing booming business.

The lessons are clear:

ü If you want your mall to be successful, have perseverance to develop and maintain a winning tenant mix over a period of time

ü Your own location need not necessarily be a limiting factor to develop a different profile of business but if you develop the right infrastructure and its surroundings, sky is the limit to achieve success.

ü People can make a great difference but the ownership team needs to put its passion forward and its own skin in the game first before relying on its professional team’s talent and experience.

Given the right commitment, any dead space can rise from the ashes, like Phoenix!

- Dr. Gibson G. Vedamani