Apparel sales may remain subdued this festive season amid economic slowdown

Consumer sentiment picks up, but average ticket purchase size reduces

Apparel sales are likely to remain subdued this festive season amid the economic slowdown. Apparel manufacturers and retailers had witnessed a sharp decline in sales until August.

While consumer demand this Navratri, which started late in September, has rebounded, the average ticket size is small, which will likely to keep sales subdued this festive season ending Diwali.

“However, some brands have reported positive signs in their sales and are likely to match their overall revenue for the festive season last year, or witness a marginal growth,” said Rahul Mehta, president, Clothing Manufacturers Association of India (CMAI).

Apparel retailers have been offering heavy discounts of up to 60 per cent to improve their sales. Future Group, for example, is running discount offers of up to 60 per cent on apparels through third-party online sales, including Amazon India, and also offline via its own retail chains such as Big Bazaar and fbb.

People in the know said discount offers have helped improve apparel sales in terms of volumes. The impact on the revenue, however, is yet to be ascertained.

“We are promoting our products through cross-selling of fashion accessories this festive season to improve our sales. We offer branded denim at various price points. Also, we offer apparels for all classes of consumers and they are cost-effective. While sales are tough this festive season, we are hopeful of achieving high single-digit growth due to various interesting trade tricks that we have adopted to boost our sales,” said Vikas P Jain, director, Kewal Kiran Clothing (KKCL), the manufacturer and wholesaler of branded denims such as Killer, Lawman, Integrity, and Additions.

KKCL, which sells apparels through owned stores and franchises, have identified offers like free deodorants and a chance to win mobile phones for crossing a threshold of the purchase value, Jain said, without divulging details.

With the slowdown in auto sales and other parameters indicating a slowdown in the rural economy, apparel sales are set to be impacted. Besides, Navratri and Diwali festivals are early this year.

“Consumer sentiment is skewed in favour of lower ticket size this year as the festive season comes ahead of maturity of kharif crops. Since farmers bank mostly on the harvesting of early kharif crops to receive some cash flow, which is delayed this year due to the late onset of monsoon rainfall and its uneven distribution, the agriculture-based purchase may be aggressive,” said a senior executive of one of India’s largest apparel retail stores.

However, “we are hopeful of a recovery in apparel sales in the remaining period of this festival season,” Mehta added.