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Apparel brands have launched their year-end sales earlier to resolve piled-up inventory, and offset the sluggish up-take of winter wear garments.
Fashion brands like H&M, Uniqlo, Levi’s, and Marks & Spencer, along with multi-brand retailers like Lifestyle and e-commerce websites, launched their year-end sales as early as mid-December.
“This was a two-pronged departure from usual practice. Usually, festival sales start closer to Christmas or New Year, but this year they started almost two weeks before that. This also meant that there was not much gap between the year-end festival sale and the Black Friday, which was held on November 28,” a merchandise executive at a global apparel brand who did not wish to be named, told Business Standard.
Industry sources said that while some brands launched a year-end sale for the first time this year, others were putting a higher volume of merchandise on up to 50 per cent off.
“The market is slow this year, which is also evident in the sluggish demand for winter wear in the northern regions. Retailers expected winter wear to sell well, because of the weather predictions, but that didn’t happen,” said another executive at a global fashion brand. The rate cuts in Goods and Services Tax (GST), announced in September last year, have also failed to spur consumption as expected, he added.
In September the government revised the GST rates on apparel and prices of items up to ₹2,500 came down by over 6 per cent, while garments priced above that turned costlier as the GST rate rose to 18 per cent from 12 per cent.
“We expected sales to go up significantly after the GST cuts were announced, but that didn’t really happen. Despite a longer Black Friday sales window, demand did not intensify. This prompted us to launch our year-end festival sales earlier,” the executive added.
While temperatures are expected to go up in January, it is also the month of Republic Day sales – a major sales occasion in the country.
“Only January presents a very small window to brands and retailers to sufficiently liquidate their inventory. They have to ensure that they manage to sell at least 50 per cent of their winter stock in December for the supply chain to move in an optimal manner,” the executive further said.
Brands also start to launch their spring-summer collection in stores around Republic Day.
"Sales were also pushed to ensure that inventory does not pile up later in the year and new season launches see a good momentum," the merchandising executive said.
New brands that entered the Indian market this year are taking this in their stride. “We realise there is more demand for medium weight winter apparel instead of heavy jackets and trench coats. It is a lesson for the next winter season,” an industry executive said.
