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Apparel retailers battle poor sales in discount season

Negative market sentiments, decline in consumers' purchasing power resulted in dismal sales for retailers

Vinay Umarji  |  Ahmedabad 

Contrary to their anticipation, the end of season (EOS) discounts for winter inventory have not reaped much benefits for According to CMAI, domestic apparel sales were not so encouraging despite retailers offering discount ahead of schedule.

"Third quarter financial results were turning out good for and hence they anticipated the good run would continue into the end of season discount sale. But the negative market sentiments and decline in consumers' purchasing power resulted in dismal sales for retailers," said Rahul Mehta, president of Clothing Manufacturers Association of India (CMAI).

Arvind Brands which had begun offering discounts quite early had to do away with the same due to poor as well as controlled production. "We were only producing as per domestic which were quite poor and hence closed our discounts as early as couple of weeks ago. We also didn't have too much stock to liquidate," said J Suresh, Managing Director and CEO at Arvind Lifestyle Brands Ltd and Arvind Retail Ltd.

Arvind had in in fact offered discounts at an average 10 per cent lower than last year. However, according to industry experts, retailers with large winter inventory may have to extend their discount seasons in order to sustain themselves amidst dwindling sales.

According to industry experts, like-to-like store growth in apparel retail have been only at around 5-8 per cent as against the anticipated 10-12 per cent.

"Like-to-like store growth also took a hit during the due to poor market sentiments. In fact, retailers like Shoppers Stop have already begun focusing on summer arrivals given the discouraging EOS discount sales," said Vinay Chopra, apparel retail consultant and former head of operations at Promart Retail Ltd. Shoppers Stop officials were not available for comments despite repeated attempts while its vice chairman BS Nagesh refused to comment.

At denim apparel retail chain K-Lounge, run by Kewal Kiran Clothing Ltd., the player saw reasonable sales only during the weekends. "Our Republic Day weekend sales was ok. I won't be able to say whether it was better or worse," said Ashish Barodia, head - retail at Kewal Kiran Clothing Ltd.

Chopra added the unlike last year, launched the EOS discounts a week or two earlier but that has not helped them so far. "Add to that, with early exams in schools in February, the sales may not pick up in the coming weeks as well," he said further.

Experts also state that as against the usual upto 50-60 per cent discount rates, apparel retailers may also have to hike the same by another 10-15 per cent in order to better their current sales in the

"While low inventory helped some apparel retailers to close down their discount seasons early, others will have to extend it for almost a month if they have to survive amidst poor retail Also, retailers have not experimented much with changes in discount rates," said Prashant Agarwal, joint managing director of apparel consulting firm Wazir Advisors Pvt. Ltd.

First Published: Thu, February 07 2013. 19:18 IST