Should The Shopping Center Be Able To Reduce The Investment Threshold For The Introduction Of Fast Fashion Brands?

Blooming shopping centers

Brand appetites.

At present, in order to introduce fast fashion

The newly opened shopping center has given decoration subsidies and rent reduction, which has become a "new normal" in the industry.

Previously, such treatment was only LV, CUCCI, PRADA and so on.

The brand can be enjoyed.

Then, should shopping centres reduce the threshold for attracting fast fashion brands and give special treatment?

Enjoy luxury brand treatment

At present, in order to attract popularity, H&M, ZARA, UNIQLO, GAP, C&A and other fast fashion brands have become the standard for the opening of shopping centers.

However, in order to introduce these fast fashion brands, the shopping center's pay is rising, and giving decoration subsidies and lowering rents are new bargaining chips.

According to Li Gang, deputy general manager of Beijing's first Grand Canyon and the current Hong Kong and China Real Estate Development Co., Ltd., it was said that in 2010, the industry did not have this kind of ethos, but now the decoration subsidy and the rent reduction have become a trend.

At that time, although the first Grand Canyon was the first shopping mall in Nancheng, Beijing, it still attracted GAP and H&M in normal circumstances.

"At that time, we did not give decoration subsidies, but later commercial projects, especially those located in the two or three tier cities, wanted to recruit fast fashion brands. It was not so easy. Many of them had to subsidize decoration."

Li Gang said bluntly.

"This kind of ethos has been formed in recent years. It was impossible before."

Wang Zhiming, general manager of Beijing Greenland Beijing Commercial Management Co., Ltd., further admitted.

Luo Qihua, director of North China Regional Department of retail Property Department of Jones Lang LaSalle, said that the practice of subsidization and rent reduction was only for luxury brands. However, with the increase in the number of commercial projects, shopping centers can only reduce the threshold of investment and give some special treatment in order to recruit fast fashion brands.

The discourse power of fast fashion brands has been strengthened, which is closely related to the rapid growth of shopping centers in China in recent years.

It is understood that the growth rate of shopping centers in China has been maintained at around 25% in recent years.

According to the data from China Unicom, there are about 3100 shopping centers in China, and 4000 are expected to break through in 2015.

At the same time, China is currently in the stage of fanatical construction, currently occupying more than half of the world's built shopping centers.

With the increasing number of shopping centers and the fierce competition among commercial projects, the right to speak in the fast fashion brand is weakening.

The Suzhou flower center is a project opened by Columbo business group 2 months ago. Its total volume is 110 thousand square meters and is located in the regional shopping center.

At present, there are chain restaurants, fast fashion, children's experience, entertainment and so on.

Among them, for the two fast fashion brands of H&M and C&A, project operators give special treatment.

Although the operation process of three shopping centers has been operated, the Suzhou flower center is the first shopping center with fast fashion brand introduced by Columbo commercial group.

Sun Xudong, the steering director of Columbo's commercial Limited by Share Ltd, told reporters: "before the fast fashion brand was unimaginable, it could attract the most brands like VERO MODA, ONLY, JACK & JONES, SELECTED, etc., but now, with the sinking of fast fashion brands, we have begun to introduce these fast fashion brands."

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A gaudy face project?

Because fast fashion brands are becoming increasingly strong and appetite is growing, shopping centers are beginning to give up hiring them.

The future sinks, located in the eastern CBD District of Beijing, is a newly built shopping center of ocean real estate. This year, it officially opened to the public in June this year. Its main position is to become a leisure spot for young white-collar workers.

But in terms of rent, Wu Guoqiang, director of future exchange, gave up the fast fashion brand.

Located on the Chaoyang Road in Beijing, the future sink has no large volume of shopping center in general sense. The commercial area can only be 13 thousand square meters. In order to make this project a small and exquisite shopping center, Wu Guoqiang's investment promotion team, besides recruiting 4000 square meters of Yao Lai Jackie Chan International studios, has no large area of other businesses. Even the supermarket of the community shopping center has not been introduced into the supermarket.

"Supermarket in the nearby halls store can satisfy the needs of the surrounding residents. We have no supermarket in the ocean itself. We can only recruit from the outside. This has no advantage for us.

Moreover, supermarkets also need larger business areas, so we recruited 7-11, Watsons and so on to do an alternative.

Wu Guoqiang told reporters.

When reporters asked why they did not recruit H&M, ZARA and other fast fashion brands which were more suitable for future positioning, Wu Guoqiang said, "every shopping center is fast fashion brand, easy to form homogenization."

In fact, how fast the fashion brands can really play a big role in the project is still unknown.

Wu Guoqiang, who once worked in Cade business, recalls that when Kate MALL had just opened a project, in order to attract passenger flow, the conditions for decoration subsidies and rent free were good, but neither H&M nor ZARA had been stationed.

Now the brand wants to enter the shopping mall, but it can only wait in line.

Fast fashion brands in shopping centres do not necessarily help them grow fast.

Wu Guoqiang said, "for the sake of face work, to show others, spend a lot of money to recruit some fast fashion brands that they do not really need, and the pain inside is actually only known to themselves."

The most convincing proof is that although the number of shopping centers is increasing year by year, there are many fast fashion brands backing up, but there are few truly profitable ones.

Wu Guoqiang analyzed this way.

Zhou Sha, general manager of Beijing branch of Chau Group, told China Business Daily that the success rate of shopping centers in China is less than 20%.

In every shopping mall, 1/2 can't work every year, and there are 1/2 in the project that starts, but in all the projects that are open, there will still be 1/2 unable to earn money.

The success rate of Chinese shopping centers is only about 1/8.

In Wu Guoqiang's view, the most important part of the newly opened shopping center is to grow together with tenants.

It is necessary to recruit some tenants who are in line with their own positioning rather than stare at fast fashion brands.

Patch is not everything.

Nevertheless, there are not many shopping centers that dare to say no to fast fashion brands.

Wang Zhiming, general manager of Beijing Greenland Beijing Commercial Management Co., Ltd., is busy with the colorful city of Fangshan recently. The project will be open to business this month.

Among them, the commercial area of 80 thousand square meters, hoping to create a shopping, leisure, entertainment in one family life shopping center.

The early plan of Fangshan Greenland colorful city is to introduce fast fashion brands such as H&M and UNIQLO, but at the moment, the opening of the fast fashion brand has been lost.

"Taking into account the popularity of fast fashion brands, we have been very willing to introduce."

Wang Zhiming said.

But reality can only disappoint Wang Zhiming.

In an interview with reporters, Wang Zhiming said that although UNIQLO had plans to open stores in the suburbs, Hua Guan was the first to be promoted by Fangshan's local retail leader.

H&M and so on although the green space has given the good condition, but the other side is not willing to shop in Fangshan, therefore did not discuss.

In the context of the current adjustment and contraction of retail trade, it is not easy to say no to fast fashion brands.

Because, compared with other brands, fast fashion brands have a strong ability to gather customers.

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Sun Xudong, the steering director of Columbo's commercial Limited by Share Ltd, said, "although Suzhou's fast fashion brand H&M and C&A account for only 3000 square meters, its contribution to passenger flow is as high as 10%."

According to Sun Xudong, the current Suzhou flower center has about 50 thousand passengers per day, and the passenger flow on weekends can be increased by 30% to 40% on this basis.

Among them, because the influence of fast fashion brand is very large, the passenger flow of 1/10 is attracted by fast fashion brand.

For a shopping center with an area of 110 thousand square meters, the proportion of less than 3% of the fast fashion brand can contribute 10% of the passenger flow, which is enough to explain the position of fast fashion brands in the eyes of shopping centers.

According to the insiders, it is a lie to say which shopping center does not want to recruit fast fashion brands.

But only by subsidizing, fast fashion brands will not necessarily choose that project. After all, fast fashion brands also have their own shop plans.

An example that can be used as a reference is that when the new light world opened just 6 years ago, it had reserved a very good location for LV, and also had a lot of decoration fees, but at last LV did not enter.

Last year, LV finally entered the Xinguang world. It did not give big subsidies to decoration, and its location was much worse than that of CUCCI.

Sun Xudong said frankly, for fast fashion brands, it does not mean that shopping centers can give decoration subsidies to shop in the past. The other party also has pre assessment criteria to see if they are worth opening.

After all, fashion brands are the main players in the cost of business.

According to Luo Qihua analysis, fast fashion brand shops are risky.

In fact, fast fashion brands do not particularly value whether they will give decoration subsidies.

They are more concerned about whether the project itself is good, the team's operational capability and whether the shops can make profits after entering, these factors are the key to deciding whether to open their stores.

Because once the fashion brand decides to open a store, it will increase a lot of costs, including inventory, manpower and so on. Once the sale is not up to date, it is very likely that all the investment will be wasted.

Lack of market rules in game theory

In fact, the fast fashion brand in the shopping center not only needs to give early decoration subsidies, but also has lower rental contribution in the later stage. For this reason, when the fast fashion brand is introduced, the negotiation between the shopping center and the other side is actually a game process.

Li Gang disclosed that although the previous Grand Canyon did not give decoration subsidies to GAP, in fact, compared to several brands of fashion fashion, the rent contribution of GAP was lower than 1/3.

This is because GAP at that time is more consistent with the location of the first Grand Canyon, which has both image and money, and can also save popularity.

"We have abandoned the practice of rentals now. For fast fashion brands, we have to use the mode of business deduction, and extract 6 to 7 points per month."

Sun Xudong told reporters.

In Luo Qihua's view, the strength of fast fashion brands can not be attributed to fast fashion itself.

In fact, this is a process of game between the two sides, depending on whether the project has advantages, whether there is a gathering capacity, whether the location is good enough or not.

At present, it is not for all shopping centers and fast fashion brands to ask the other party to give decoration subsidies.

If the shopping center needs the fast fashion brand as the "doorstep God" and needs this customer friendly weapon, it is inevitable to relax the investment conditions.

For now, the role of fast fashion brands for many shopping centers is self-evident.

Luo Qihua analyzed this way.

"At present, many shopping centers are sinking to the suburbs or two or three tier cities. If the population is large enough and the high-end consumers are enough, the introduction of fast fashion brands is actually a good choice.

Because the price of fast fashion brands can be affordable by many people, and indeed can bring tourists to the project.

Luo Qihua further said.

But for some mature shopping centers, the ability to gather customers is very strong, the geographical location is also very advantageous, and it meets the demand of fast fashion brands. In fact, shopping centers do not give decoration subsidies, and the other side is also very willing to enter.

Luo Qihua said.

According to Wang Zhiming observation, luxury brand shopping center already has a set of mature investment standards, and for fast fashion brands, whether it should be introduced, whether or not to give decoration subsidies, how much decoration subsidies should be given, all should be judged according to the geographic location, maturity and their needs of commercial projects.

In fact, between the brand and the shopping center, who should be strong and weak should be determined by the supply and demand relationship.

According to Wang Zhiming, at present, fast fashion is not only the clothing brand, but also the brand of fast fashion restaurants such as grandma's home and green tea in recent years.

Due to the rapid development of commercial real estate in recent years, the demand for brands is getting bigger and bigger. This also urges fast fashion brands to put forward some more stringent entry conditions.

"In this context, if shopping centers need fast fashion clothes or catering brands, they must negotiate and compete with each other.

Conversely, if a shopping center's business atmosphere is already very strong, no need to rely on these fast fashion brands to pull, fast fashion brands will also take the initiative to reduce their value to enter, let alone what conditions.

Wang Zhiming said frankly.

In Luo Qihua's view, when shopping centers talk with merchants, they should do their best.

We need to see whether we need this brand, not because it is a brand.

After all, the construction of a shopping center requires a lot of capital investment in the early stage. If the project is completed, there is no way to return the funds in time, which will affect the cash flow of the real estate companies.