The shop rents in the big shopping malls in Pakistan are higher than they are in the US.
One of the oldest menswear brands in Pakistan has taken the decision of closing its physical operations online due to the high-rising prices of real estate.
The CEO of Cotton and Cotton—Alam Najiullah said that physically they are no more in the apparels business.
He indicated that a shop measuring 1,000 square metres anywhere in North America could be rented for a sum of $5,000 monthly, whereas in Pakistan, the rent of such a shop was higher. He added that because of the greedy landowners, they are forced to shut their business, which was the first chain of menswear in Pakistan. He further mentioned that if they would operate any longer, the landlord would consume them.
The last physical store of Cotton and Cotton closed back in the month of October 2019 in Karachi. The shop was paying rent of Rs.850,000 per month. The rent had been Rs.300,000 just four and a half years back.
He mentioned that many other apparel businesses were thinking to operate online and reduce the number of physical shops because of the surging prices of real estate.
He also indicated that in contrast, the women apparel are 305 times higher, which was the reason why new entrants opt for this business segment.
Najiullah mentioned that large businesses get concessions from the owners, but they do not offer any discount to the smaller ones. And said that the same is the case with the government authorities.
Cotton and Cotton was established in the year 1991 in Karachi, Islamabad and Lahore with a network of 14 shops. When it stopped its operations, it had a total of 10 shops in the 3 cities.
The CEO of the company informed that they would now be targeting the Pakistanis living abroad. And for the Pakistani market, they would be introducing relatively low-cost shirts starting from Rs.3,000.