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"Third-quarter financial results were good for apparel retailers and hence, they anticipated the good run would continue into the end of season discount sale. But the negative market sentiments and a decline in consumers' purchasing power resulted in dismal sales," said Rahul Mehta, president of the Clothing Manufacturers Association of India.
The Arvind group, which had begun offering discounts quite early, had to do away with the same due to poor demand as well as controlled production. "We were producing according to domestic demand, which were quite poor, and hence closed our discounts a couple of weeks ago. We also didn't have too much stock to liquidate," said J Suresh, managing director and chief executive officer of Arvind Lifestyle Brands and Arvind Retail.
Arvind had offered discounts at an average of 10 per cent lower than last year. However, according to industry experts, retailers with large winter inventories may have to extend their discounts for a longer period to sustain themselves amid dwindling sales.
According to industry experts, like-to-like sales growth in apparel retail has been only at five-eight per cent against the anticipated 10-12 per cent. Like-to-like sales growth is a measure of growth based on sales in stores that have been open for at least a year.
"Like-to-like store growth also took a hit during the discount season due to poor market sentiments. In fact, retailers like Shoppers Stop have already begun focusing on summer arrivals given the discouraging discount sales," said Vinay Chopra, an apparel retail consultant and the former head of operations at Promart Retail.
When contacted, Shoppers Stop Vice-Chairman B S Nagesh refused to comment.
K-Lounge, the denim apparel retail chain run by Kewal Kiran Clothing Ltd, saw reasonable sales only during the weekends. "Our Republic Day weekend sales were ok. I won't be able to say whether it was better or worse," said Ashish Barodia, head-retail at Kewal Kiran Clothing.
Chopra added that unlike last year, apparel retailers launched discounts a week or two earlier, but that had 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."
Apparel retailers may have to offer more than the usual 50-60 per cent discount rates this time to better their current sales, said experts. "While low inventory helped some apparel retailers close down their discount seasons early, others will have to extend it for almost a month if they have to survive amid poor retail demand. Also, retailers have not experimented much with changes in discount rates," said Prashant Agarwal, joint managing director of apparel consulting firm Wazir Advisors.
