India's apparel biggies record higher sales in Q1
India’s apparel industry is continuing its upward growth curve with the overall index value recording 6.2 points, according to The Clothing Manufacturers Association of India’s (CMAI) Apparel Index for April-June 2015. Much like the previous quarters, it is the bigger brands which have done far better with higher sales turnover and lower inventory holding.
Small and mid-level brands are lagging behind on all counts - sales turnover, sell through, inventory holding or investment. But there is a sense of optimism with the industry predicting good or excellent future growth.
At 6.2 point growth, the figure is approximately 54 per cent higher than the index for small brands (with turnovers of Rs 10 to 25 crore). Small brands have grown by 4.03 points while mid brands (with turnovers of Rs 25 to 100 crore) have grown by 6.75 points. In fact, mid brands performed much better than small brands. But the actual success stories were the large brands (with turnovers of Rs 100-300 crore) that have grown by 7.93 points and the giant brands (with turnovers of above Ra 300 crore) that have a high index value of 10.67 points.
The First Quarter Index clearly indicates that large and giant brands are doing much better than small and mid-level ones. The Index pattern this quarter, much like last quarter, reflects that as the size of brands have gone up, the performance has improved. Interestingly, sales turnover also increases in the same pattern and, inverse, in the case of inventory holding. It clearly reflects the impact that sales turnover and inventory have on performance, the report said.
Commenting on growth in sales turnover, Vineet Gautam, Country Head, Bestseller India, said, “We have opened ONLY stores in cities like Hyderabad and Lucknow and continue to be aggressive in our growth strategy. The jump in brands’ sales turnover is a testimony of all our efforts being in the right direction.” Similarly, Kunal Mehta, VP-Business Development and Marketing, Being Human, explains, “We increased the number of stores. Our SIS numbers have gone up and we started vertical distribution and are now available at around 200 MBOs in India. We have also increased our e-commerce partners.” Adds Sandeep Jain, Executive Director, Monte Carlo, “Our sales turnover grew because of the overall good sale at the retail level.”
Among the four groups of brands based on turnovers, giant brands have been growing consistently each quarter. This time, too, giant brands grew the most in sales turnover while their inventory holding did not increase much, whereas small brands’ sales turnover grew the lowest and had the highest increase in investment holding. Growing sales turnover, perhaps, explains why giant brands have a strong Index value at 10.67, whereas small brands scored a low 4.03.