About a hundred kilometers from Coimbatore, beyond the textile town of Tiruppur in Tamil Nadu, is a dusty little town called Erode. Over the years, the area has earned a reputation as Tiruppur’s market – clothes made in the town’s many factories often find their way to Erode’s retail and wholesale counters.
Perhaps the best-known address serving as a nod to Erode’s status as a textile market is Texvalley, a sprawling wholesale complex spanning 20 lakh square feet and hosting 500 shops of wholesale that cater to large buyers and retail customers. By Diwali this year, Texvalley, say its promoters, could take on a whole new look: that of a destination shopping center with a multiplex, pubs, gourmet restaurants, a 500-seat food court, entertainment and a hotel, on site. .
In a conversation with CNBC-TV18Texvalley developers said they have reason to believe post-COVID demographics have led to a catchment area that justifies establishing a destination mall of this magnitude.
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“There is pocket money and disposable income, many people have made the decision to stay in their hometowns while continuing to work for their global organizations,” said C Devarajan, Vice President of Erode Textile Mall Ltd, owner of Texvalley. “Almost 5,000 people in Erode now have better incomes because they live in a small town,” he added, “as the prices of agricultural raw materials have also increased – agriculture is a major occupation here – people actually have money to spend, despite inflation.”
However, the 500 wholesale brands that call the mall home are not rushing. According to Texvalley, the new mall avatar is expected to house both B-to-B and B-to-C businesses, with 4 lakh square feet set aside for consumer businesses covering electronics, apparel, accessories, home furnishings , catering, entertainment and leisure. goods. After the makeover, the monthly attendance of 60,000 people at Texvalley is expected to drop to 5 lakh business executives, customers and tourists, the company said.
“We do around Rs 750 crore in business per year and expect it to hit Rs 12,000 crore over the next seven to ten years,” said Devarajan, “However, over the next two years alone, our vision is to reach Rs 4,000 crore in annual revenue – that’s six times what it is today.” A market report by AC Nielsen on South India’s largest textile market is in line with these ambitions, as it forecasts Texvalley’s revenue to reach around Rs 5,000 crore by 2024, if the destination mall takes shape at the appointed time.
Those goals aside, analysts say an integration of B-to-B and B-to-C businesses on the scale that Texvalley hopes to achieve, may be a first for Indian mall retail. “The attempt is to blend commerce and pleasure to result in a model that increases the mall’s catchment area,” said Sushil S Dungarwal, Chief Mall Mechanic at Beyond Square Feet. “A mall attracts people within a seven-mile radius, whereas a B-to-B commercial space can attract people from everywhere,” he explained, “Here (B-to-B businesses and B-to-C combined), the main watershed passes at around 50 to 100 kilometers, and that will be a key differentiator.”
The textile industry is going through a difficult period
Incidentally, the makeover comes at a time when textiles are facing their toughest phase in Indian markets. In India, a cotton candy has seen its price drop from Rs 43,000 in April 2020 to Rs 1.1 lakh today. According to reports, hundreds of factories in the city and neighboring Tiruppur have closed as a direct result of their inability to meet supply costs. Less than a month ago, 10,000 textile shops in the neighborhood lowered their shutters in protest, and 25 textile associations took part in the strike.
Yarn prices have also doubled over the past two years. According to the Erode Cloth Merchants’ Association, the city’s ’40-year-old cotton yarn’ has seen its price rise from Rs 200 to Rs 400 per kg, while ’30-year-old cotton yarn’ has also seen a price increase – from Rs 170 to Rs 330 per kg.
Against the backdrop of this scenario, Texvalley wholesalers are more than happy at the prospect of better footfall, as these traders have seen their business halve and their supply budgets double. “A bigger mall with more customers is a good idea as it will bring better footfall,” said Dhanalakshmi Mohan, owner of Angalamman Tex, a wholesale store in Texvalley. “A piece of fabric that we used to buy for Rs 150 now costs Rs 250,” she added, “We have no margins, but we have to cut our margins by 20% and sell , because it’s the only way to do business.”
Other stores in the mall have resorted to price hikes in order to cope with escalating commodity prices, with most stores seeing increases of 15-20% per product, translating into higher prices from 200 to 300 rupees.