The apparel and accessories sector, which falls in the discretionary category, is witnessing 30-35 per cent lower sales this season on the back of the slowdown which has triggered salary cuts and retrenchment across sectors.
Mehul Choksi, chairman and managing director, Gitanjali Gems, says: “Yes, the slowdown has had some impact on the sales. Sales have been impacted by 30-35 per cent.” Balvinder Singh Ahluwalia, president, Koutons Retail India, agrees: “I must admit that the slowdown has affected the retail sector as much as any other sector of the economy. However, given the unique sales and distribution model adopted by Koutons, the impact on the company is lower.”
Unlike last year holiday season, this season is not exciting. Ambeek Khemka, group president, Vishal Retail, says: “Sales have been affected but we have still to evaluate the degree. Normally, sales are very high in November-December, but I see some drop this time.
Being a non-essential category, apparel and accessories are feeling the recession pinch, reasons Pinakiranjan Mishra, partner and industry leader, retail and consumer product practice, Ernst & Young. While sales in the metropolis are weakening, C and D category towns are doing well, he adds. As the consumers in C and D category towns are not exposed to stocks and other investments, they are not affected to the extent metropolis consumers are affected.
A Pantaloon Retail India spokesperson concurs: “Yes, C and D category towns continue to do well.” Ahluwalia adds that the record crop output in the last two-three seasons followed by high aspiration levels of individuals has ensured that the growth of retail sector in B and C category continues.
Value offering brands like Pantaloon are doing well. Analysts believe old and strong brands like Raymonds will also be able to stand it, but newer brands will find it difficult to manage.
Vasanth Kumar, executive director, Max Retail Stores (an international brand which offers apparel and accessories for women, men and children), says: “Since we are a value product, we are ‘relatively’ recession-proof. But a marginal impact is there. There has been a 20 per cent drop in mall walking, which is a concern.”
The recent terror attacks have also resulted in drop in mall walkings. Brands along with mall owners are doing joint events to increase footfalls. “We collaborate with mall ow ners to have joint events to attract consumers. Besides, we are looking at increasing bill value. There are special offers like beyond a certain amount purchase, we give some free gifts to fatten bill value,” adds Kumar.
Some have thought of more innovative ways. They are changing merchandise every month to attract buyers. Brands have increased promotions. Choksi says: “We are relying on dealer incentives and promotional offers.” Khemka says: “There are heavy discounts and buy one get one free schemes. We are selling some products even at negligible margins.”
Meanwhile, innovative thinkers are not relying on the age-old formula of discounts alone. “Since a Rs 30-50 discount doesn’t push sales, we are relying more on value add-ons. Besides, we have introduced lower slab products,” Kumar says.
Nevertheless, the segment will have to learn to maximise lower footfalls for some time to come.
