Giant brands are racing ahead: CMAI report

01 Dec '15

4 min read

“In the past two quarters, there is a major decrease in footfalls at stores, which is mainly responsible for the decrease in the sales turnover and impacts sell through as well. However, our conversion ratio and basket size has increased but due to lower sales, the sell through has impacted. Increase in inventory holding also is one of the prime reasons for that. This is not with us only but with other brands as well. I am hopeful that the situation will definitely improve in 3rd and 4th quarter of 2015-16,” explains Blackberrys' CFO Hemant Gupta.

Speaking on the correlation between sales turnover, inventory and sell through, Rajiv Nair, CEO, Celio, says, “Reducing inventory continues to be a core area of focus at Celio. Sales in the last quarter have been lukewarm. Hence, we ensured renewed focus on liquidation through specific promotions and EOSS. We are on our inventory targets, which we keep reassessing every month. We avoid overfilling stores and focus on timely replenishment to avoid inventory risks.”

The Index value in second quarter of last fiscal was higher at 7.96 compared to 6.68 for second quarter of current fiscal. Which means overall the apparel industry failed to grow as much as it grew in the same quarter last year on all aspects, be it sales turnover, sell through or fresh investments. On the other hand, inventory holding showed much lesser increase for good in 2015, as a lower increase reflecting better control on inventory, causing lesser impact on the bottom line.

However, October-December being a quarter that enjoys better sales during the festive seasons around Diwali, Christmas and New Year, brands predict an improvement in market sentiments, and nearly 41 per cent of brands feel that the outlook for next quarter is good, and another 27 per cent brands say their outlook is 'excellent'. (RKS)

Fibre2Fashion News Desk – India

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