Several fashion and lifestyle brands reported a 10% to 20% drop in business over the past three months compared with the same month last year as consumers cut back on discretionary spending.
Mumbai: Fashion brands worldwide are reporting dismal sales over the past three months, prompting many retailers to delay purchases or refuse deliveries from suppliers due to stockpiling due to concerns. lackluster consumer sentiment.
Several fashion and lifestyle brands that IndiaRetailing spoke to reported business declines of 10% to 20% in the last three months compared to the same period last year as consumers began to cut back on discretionary spending. amid high interest rates and rising costs of everything from food. to fashion.
Vipin Kapoor, president of Kapson, operates about two dozen Kapsons and Kapkids department stores and operates Tommy Hilfiger and Jack & Jones franchises among other brands. Sundeep Chugh, president of ethnic brand Biba Fashion Ltd, also said business activity has been at a low level in recent months.
Many brands’ top executives say last year saw strong growth in their post-pandemic business due to pent-up consumer demand for apparel and style items. live differently. The companies are hoping to continue the positive business streak this year, which has led many fashion retailers to go ‘overzealous’ with orders from suppliers. They had expected growth over the past year, which did not happen.
“For example, a consumer wanted to buy two shirts last year but ended up buying three or four. So everyone’s wardrobe is full to some extent,” said Rahul Mehta, chief advisor of the Clothing Manufacturers Association of India (CMAI). He said high inventories have prompted fashion retailers to push for two-year end-of-season sales to mid-June compared with the traditional practice of having a mid-July sale. “The end-of-season sales haven’t done well this year and that’s a cause for concern.”
An executive of a global sportswear brand also cited increasing competition between the growing number of fashion and lifestyle players in the market with more and more global and local brands entering India and existing players expanding strong post-pandemic in the context of customers returning to physical stores.
“The difference between competing brands or their products is very low……. a t-shirt is a t-shirt, he said asking not to be named. “So there is a fierce competition between brands to attract the same wallet and that hurts especially in times of low consumer sentiment.”
As inventory piles up in warehouses, brands are also cutting back on new orders. In many cases, they refuse to receive products they have ordered, according to executives who work with apparel suppliers.
Both Kapoor and the global sportswear brand’s CEO said online sales were also affected. Generally speaking, online sales compensate or compliment brick-and-mortar sales.
“The next two quarters are looking tough,” the CEO said.
As a result, a wide range of brands from small to large have cut their orders and are not honoring the delivery of previously ordered orders.
“Brands are delaying pick-up by up to three months,” said Kapoor of Kapsons. “There will be a lot of inventory adjustments this year over the next two quarters.”
However, Harminder Sahni, co-founder of retail consulting firm Wazir Advisors, feels the current business downturn is just a blip. He said it will have almost no impact on India’s overall consumption story. He said brands should continue to focus on the long-term market rather than getting bogged down in small nudges like the current market.
According to rival consulting firm Technopak Advisors, India’s apparel market is expected to grow 12% year-on-year to reach $168 billion in fiscal year 2031 from the current $65 billion in annual business.
