Paying rents for shops is a huge burden on business owners in Pakistan considering the skyrocketing rates set by landlords.
These increased rents have prompted a number of businesses to set up online stores or close them off altogether after failing to balance the payments.
According to the CEO of Cotton and Cotton, Alam Najiullah, the rents charged by landowners in big shopping malls are higher than those of the US.
Sharing his personal experience in an interview with a local news outlet, he claimed that 1,000 sq. m shops can be rented for $5,000 in the US, however, they were being charged Rs 850,000 a month in Pakistan, which is why they have decided to shut down their physical business and shift totally to e-commerce. However, he is optimistic about using it as another opportunity to succeed in the apparel business.
They closed down their last branch of Cotton and Cotton in October this year as they were forced to pay Rs 850,000 per month which was Rs 300,000 a little over 4 years ago.
“Although this [granting concessions to large businesses] happens around the world, many retail businesses are closing in the US and UK for this reason and therefore in Pakistan as well”, he further told.
He also revealed that spaces for men’s apparel shops were very expensive (Rs 5,000 per sq ft)Â as compared to those specializing in women’s clothing (Rs 1,500-3,000 per sq ft).
Alam Najiullah now plans to target overseas Pakistanis, saying that “our company started as a Pakistani company and will remain Pakistani even if we do business outside the country”.
Amazing things will happens when you Listen to your customer and e360.pk is doing that
I think its true to some extent but main issue with the brand is the high price , they are selling shirts of price 5k-7k, men are not gonna buy such expensive shirts here in Karachi.They are happy with zainab market.
Yes the company seems to be out of touch with the market. However why are rents so high? Is it because there’s a dearth of good malls?
Why would foreigners buy western clothing from a Pakistani company when there are many foreign brands that sell the same thing? What is the unique offering of this company?
High rents suppress commercial activity due to ever increasing fixed costs associated with doing business. This is primarily due to investors wanting to extract maximum rent to recoup their investment in as small time as possible. Also, the real estate market is unrealistically expensive due to short-selling investors buying and selling real estate for a quick profit with artificially inflated rates.
Further, the target market of this brand is men who (vast majority) do not particularly care about appearances and are conscious about cost of goods. Women on the other hand (vast majority) are ultra-conscious about appearances and inter-women garment competition regardless of cost plus they can’t dare wear the same dress multiple times publicly for fear of being mocked by other women. Perhaps, this brand should change their target market for a more effective business plan to be able to afford the shop rent?
Don’t blame rents for the death of a brand. I have been a cust,Omer on and off since the early nineties and your shirts are marginally worst than what you can get at M and S. Shame that after 25 plus years there has been zero evolution….I gather you still don’t do monograms. I would only suggest that you get into kurta pajamas.