Similar to last quarter, giant and large brands understood market sentiments and quickly, adapted, manoeuvred their growth and recorded 10.58 and 6.72 points Index Value, shows the Apparel Index which aims to set a benchmark for the entire domestic apparel industry and help brands in taking informed business decisions.
The Index shows that overall Index Value was most impacted by sales turnover than any other factor. Giant brands managed a good 10.58 points with fast clearance of goods that increased sales turnover to 8.00 points. Comparatively, large brands sales turnover grew 5.78 points. Small and mid brands sales turnover also grew at 0.31 and 1.60 points respectively.
“Giant and large brands seem to have connected with organised retail through MBOs, EBOs and large format stores and managed their business and sales turnover well. They may have taken the discounting route thereby stimulating sales to clear off inventory at store and company level. This is clearly reflected in increased sales turnover with not much increase in inventory holding,” says CMAI on the Apparel Index.
Big brands have well understood the strong correlation between sales turnover and inventory holding, while small and mid brands are more dependent on trade and with less control on retail, they are not in a position to push up sales. As Sanjay K Jain, managing director, T T Ltd explains, “Both are interlinked. We managed the same way partly with our aggressive push in the last three months and because of yarn price rise.”
Arguing on similar lines Vinod Kumar Gupta, managing director, Dollar Industries explains, “Increase in sales turnover roots in a decrease in inventory holding, as this is our, on the go season and there was huge demand. Due to this, our stocks sold out quickly. That’s how sales turnover increased and inventory holding reduced this season.”
However, for small and mid level brands improving sales turnover post demonetisation has been a challenge. Explaining the market situation Niyam, director, Blazo says, “We expected 10 to 25 per cent growth, had demonetisation not taken place. However, we managed a small increase in sales turnover at 1 to 5 per cent.” While Hemant Gogri, owner, John Noble says they saw a dip in sales turnover, “The decrease was due to cutting down production as demand had dipped post-demonetisation.” (RKS)
Fibre2Fashion News Desk – India