After a good friend read my latest article, she Whatsapped me and told me that there are just way too many malls these days. She owns two clothing stores and she said retail business is getting slower these days and most of the time, only those big name clothing stores are doing well. Especially those from overseas and spending huge amounts in advertisements. They could do this because these are chain stores and the cost of advertisement can be covered by the volume of business by all the different stores.
The only slightly better businesses would be those in the food and beverage ones. She agreed with me though that Starbucks seems to be okay, perhaps due to convenience as well as a very successful marketing campaign. Furthermore, nearly every mall would be spotting similar brand names! Thus, those who are not managed well would have to shut down in the near future. Looking at the smaller and not so popular ones like eCurve, it will be affected even more when Empire Damansara opens. Both she and I agreed though that Publika is a good and differentiated mall. If only all the malls can be this different, then perhaps more would survive and prosper.
Her friend’s store in Quill City is also not faring much better. The crowd is still mostly look, see, eat and window shop and thus her friend may also be moving out in the future. Truth is, the number of malls are CRAZY because the buyers LOVE to pay quite a lot of premium for condos nearby, next to or even above malls. Thus, even developers who has never operated malls are building them so that they can sell their properties with a premium price. I am worried for these buyers who expects every one of these malls to be successful. Some would definitely fail. It may be prudent to pay more attention to whether the developer has such experience before buying, even if the developer is a big brand. Yes, I think KL can still support more malls in future BUT if these malls are way too near each other, then only the fittest would survive. I wish my friend and her friend all the best in their businesses. Happy buying cautiously.
written on 5 June 2015
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