Ludhiana's hosiery players bear losses due to weak demand, lack of orders

Ludhiana's famous hosiery sector is staring at losses because of weak demand for winter garments this season, as many manufacturers say they faced lack of repeat orders as well as return of stocks from traders in many states.

Hosiery goods manufacturers also blame dumping of China-made winter wear items, available at much lower prices, for adding to their woes.

However, bone-chilling cold wave weather conditions prevailing in the northern region have given some sort of relief as they anticipate a pick up in demand which may lead to clearance of stocks.

Ludhiana hosiery sector, which is one of the oldest industry verticals, is famous for winter garments like sweaters, jackets, thermals, cardigans, pullovers, innerwear, shawls etc.

Several states like Uttar Pradesh, West Bengal, Rajasthan, Himachal Pradesh, Delhi, Bihar and Haryana are among key markets for the hosiery sector.

The industry representatives said they started offering discounts to wholesalers in December when the demand was not picking up.

"Because of the delayed winter, the manufacturers started giving discounts to wholesalers in December to push sales," said Shyam Bansal of Rage, a premium brand of women's wear.

A hosiery goods manufacturer said a factory unit runs at an average margin of 10 per cent and if it had to give that much discount to wholesalers then it will not be in a position to earn anything except to clear its stocks.

The manufacturer said there is a stiff competition in the market and no matter how good one's product is, wholesalers press for discounts.

The industry representatives further said initially discounts at retail counters were offered at 20 per cent in December to increase sales. Later these were hiked to 30 per cent.

"At present, several big brands are selling their winter wear items at 40 per cent discount at retail shops. Given this situation, how can a manufacturer earn with such heavy discounts," asked the industry representative.

Bansal said China-made winter wear items are also hitting the local hosiery industry hard. "If an item costs us as Rs 1,000, a Chinese item is available at Rs 600-700," said Bansal pointing out the competition posed by the Chinese goods to the Ludhiana hosiery sector.

Navin Sood, another hosiery goods manufacturer, said many manufacturers in Ludhiana are facing a lack of repeat orders from traders in many states like Bihar, Odisha, Madhya Pradesh, Rajasthan and West Bengal.

Raja Dhir, president of Daal Bazaar Merchant Association, said many traders in Uttar Pradesh, Kolkata and some southern states returned hosiery items as there was slack demand for winter garments.

"When we demand payment from a trader in other states they threaten to return goods," said Dhir.

However, an industry representative said because of severe cold wave conditions prevailing in the northern region, the industry expects stocks at retail shops and factories may get cleared but it is difficult to say that it will lead to profits given the fact that heavy discounts were being offered.

Intense cold wave conditions have been prevailing in many parts of Punjab and Haryana for the past many days.