Home / Knowledge / News / Fashion / Fashion industry sinking far off its pre-crisis growth rate: ASSOCHAM
Fashion industry sinking far off its pre-crisis growth rate: ASSOCHAM
21
Aug '09
Notwithstanding its improved global profile led by a boom during the pre-crisis period, Indian fashion industry has been hampered by the global economic recession as reflected by stark differences in the growth rates of pre-crisis and the current period, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

The ASSOCHAM Financial Pulse (AFP) Study on “Impact of recession on Indian fashion industry” analyzed that top companies catering to the fashion industry have faced huge losses as the demand of luxury readymade apparels, leather and gems & jewellery fell down drastically which impaired the sector's profitability.

Forming the major part of the fashion industry, growth rates in the net profit of companies in readymade apparel, gems & jewellery and leather products declined by 151.7 per cent, 81.8 per cent and 445.7 per cent respectively in FY 2008-09 as against ostensible growth rates of 38.2 per cent, 7.4 per cent and 87.6 per cent respectively during the pre-crisis period (2005-08).

“Even though the Indian economy is growing at a robust pace, the per-capita income of the consumers is still too low to significantly boost the purchasing power for the high-end fashion industry during the economic downturn” said Mr. Sajjan Jindal, President, ASSOCHAM.

The AFP Study carried by Assocham Research Bureau is based on the corporate results of the companies from FY 2005-06 to FY 2008-09. The analysis includes the companies which are engaged in manufacturing of readymade apparels, gems & jewellery and leather based products.

The Chamber chief said, high operating cost borne by the textile sector is the major factor responsible for the shrinkage in the net earnings of the readymade apparel companies. The CAGR of net profit in the sector, which was 18.3 per cent during the pre-crisis period (2005-08), declined by 9 per cent in last fiscal 2008-09.

The slowdown in the economy and the major fall in the exports figure in last fiscal 2008-09 are attributable for this negative dip in the net profits of the readymade apparels sector.

Severely hit by the economic slowdown, Gems and Jewellery is another sector which dragged the fashion industry in deep trouble. The sector faced a decline of whopping 81.80 per cent in the net profit during 2008-09 as against a positive growth rate of 7 per cent during the pre-crisis period. External demand for the sector dried up due to the global recession.

The AFP Study also analyzed that leather products which include finished leather, leather footwear, leather garments & clothing, bags & handbags and other accessories & products faced the grip of slowdown and the demand of these products came down drastically. Also, India's leather exports posted an almost flat growth rate in 2008-09 owing to slump in demand in major overseas markets.

The companies engaged in leather sector faced a huge dip in profitability in2008-09 as the net profit declined by a staggering 445.70 per cent. In stark contrast, the sector showed a high positive growth in net profit in terms of CAGR of 87.60 per cent during the pre-crisis period.


Associated Chambers of Commerce and Industry of India


Must ReadView All

Courtesy: Ministry of Trade and Industry, Singapore

Textiles | On 22nd Feb 2018

Final version of CPTPP pact released; to be signed in March

The final version of the Comprehensive and Progressive Agreement for...

Amazon India crosses 3 lakh seller base in less than 5 yrs

Apparel/Garments | On 22nd Feb 2018

Amazon India crosses 3 lakh seller base in less than 5 yrs

Amazon recently claimed to have crossed the three-lakh seller base in ...

Gujarat finance minister Nitin Patel. Courtesy: Global Gujarat News

Textiles | On 22nd Feb 2018

Rs843 cr for MSMEs, Rs35 cr for khadi in Gujarat budget

The Gujarat government has made a provision of Rs 843 crore in the...

Interviews View All

Smita Murarka
Amanté

‘There is huge demand in the Indian lingerie market for non-wired styles.’

Headhonchos
Indian textile value chain

'One nation, one tax' is a great concept

Luke Otten
Wigwam Mills Inc

Wigwam aims to recycle discarded yarn that doesn’t make it through the...

Sugandha Bhardwaj

<div>New Delhi-based Brinjal Designs Pvt Ltd manufactures home furnishing...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Sandip Bhojani, Manthan Patel

Krypthm Tradelink LLP is a Surat-based manufacturer of westernwear....

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

February 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
70.6%
No
12.7%
Skip
16.7%

Total Votes: 102

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.7%
No
29.4%
Skip
6.9%

Total Votes: 102

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
88.2%
No
8.8%
Skip
2.9%

Total Votes: 102

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
83.3%
No
7.8%
Skip
8.8%

Total Votes: 102


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search