Dollar shortage threatens mall retailers

…as more close outlets

Low sales due to declining consumer purchasing power and shortage of foreign exchange have become major obstacles threatening the continued existence of mall retailers, Business Day findings show.
While they are hard hit by the realities of the times resulting in default in rents usually paid in dollars as well as staff rationalisation and salary cuts.
The situation got to a peak last year when some of the shops commenced gradual packing from the malls to stem the mounting indebtedness to the mall owners and employees, further investigations by Business Day showed.
‘‘We are moving out of this store because we are not making enough sales to pay the bills. We did not record a single sale throughout the festive season,’’ Adeola, manager of U.S Polo Assn., in Apapa Mall told BusinessDay.
The manager who said they are moving their wares quietly to their other outlets disclosed that their rent in Apapa mall is four times their rent in Adeniran Ogunsanya shopping mall.
‘‘Our rent in Apapa mall is about N3.2m and in Adeniran Ogunsanya mall, we pay less than N1m but we make more sales in Adeniran but poor or no sales in Apapa mall despite the high rent,’’Adeola said.
BusinessDay findings further revealed that Busen, a Chinese clothing company that deals on men’s clothing moved out of the mall on Tuesday.  Mr Price, Ruff ‘n’ Tumble, Lifemate and Samsung had also closed their outlet at the Mall earlier. Some retailers at the mall who spoke with BusinessDay say the times have been a challenging one for them.
‘‘The last time we sold an item was before Christmas. We were more than eight staff but some were sacked and we are six left,’’ said a staff of PEP, a South African clothing store, who craved anonymity.
A manager in a top fashion store at the mall said they live in fear of being sacked even after their salaries have been slashed by 50 percent.
‘‘We made N30, 000 yesterday (Tuesday) and since morning, we have only made N10, 000 and it is almost 4pm now. One of our top managers visited this branch earlier, his body language told us that they might decide to sack some staff since we are not meeting our target,’’ said the manager who does not want to be mentioned.
In most of the retail stores at Ikeja City Mall with the exception of Shoprite, some of the attendants were busy chatting while others sat looking into space probably praying for a buyer to stop by. Although some stores had visitors looking in, most of them bought little or nothing.
‘‘Our business is shaking right now so we are just managing. We have reduced our staff and might be moving out any time,’’ said a manager in an American clothing store.
The Palms Shopping Mall was quite busy when BusinessDay visited but retailers say sales is not looking good.
‘‘Sales have not been impressive but those that appreciate quality come to buy,’’ an attendant at Lacoste, a French clothing store at the mall said.
Adenike Ogunlesi, founder & CRO of Ruff ‘n’ Tumble had told Business Day in an earlier report that business generally was going southwards due to the lingering dollar scarcity.
“We have closed some of our outlets. We are facing a market with diminishing buying power and malls that are dollar-denominated in a country where we sell in Naira.’’

CHINWE AGBEZE