Large brands top CMAI 2015 Q3 Apparel Index

25 Feb '16

6 min read

Development, Being Human Clothing (Mandhana Industries), explained, “Within three years of being operational, Being Human Clothing is selling through approximately 500 point-of sales in over 15 countries worldwide. This has resulted in higher visibility, constantly expanding customer base and higher design recognition. Our unique model of fashion, philanthropy and charity combined with the six brand DNAs (viz. love, care, share, help, hope and joy) have touched the hearts of millions of customers leading to global accessibility of the brand that lets them contribute to the cause by the simple act of shopping. Despite this overwhelming growth chart, we aim to be accessible in every nook and corner of India and worldwide.”

On similar lines Anant Daga, CEO, W and Aurelia, said, “Robust same store sales growth across EBOs and LFS coupled with aggressive footprint expansion has led to sales increase.”

A close look at sell through and inventory holding reveals that the reason for small brands not growing as much is because their increase in inventory holding is much higher than the improvement in sell through whereas in case of mid and large brands, sell through improvement is better along with better control over inventory holding.

“As a business, we believe inventories are a huge risk if it's not optimised. So we started buying more local (reduced import dependence) and just in time. Advance order placements were reduced and commitments were made closer to the season and also in season,” said Rajiv Nair, CEO, Celio.

The overall picture reveals that all groups of brands have not grown as much as last quarter, since they couldn't control inventory holding like they had done in the previous quarter. The reason for this could be that this quarter is generally considered to be the best for fresh sales and no discount period is included. And as there was not much discounting, sales turnover also didn't grow as expected, causing longer duration for inventory holding. “Advance production for the summer season” is the reason for increased inventory holding,” said Asif, Director, Officer - a mass segment brand.

Investment cumulatively indexed at 2.02, is a little lower than previous quarter. Here, too, giant brands had the highest in this quarter. As Shitanshu Jhunjhunwala, Director, Turtle, put it, “Our decrease in investment referred to a 'more focused cluster approach with regards to opening of outlets, selection of designs, right mix of apparels in stores, strong marketing activity and correct partners. In the past we made few errors in expansion and some course correction was required. Our focus last quarter was to increase throughput our existing stores and implement some of the new strategies we have made.”

The Apparel Index shows that low consumer spending has taken its toll, affecting sales turnover. While brands seem to have not held on to their inventories as much compared to the same quarter last year, they may have liquidated them through discounts much more impacting sell through that has suffered this year in comparison. Marginal increase in investments doesn't seem to have contributed enough to offset the impact of lesser turnover growth and lesser growth in sell through.

According to the index, nearly 40 per cent brands feel that the outlook for next quarter is good while 17 per cent say it is excellent. Nearly 37 per cent, foresee an average outlook for next quarter and 4 per cent feel that it will be below average. January-March being a quarter for EOSS, the Summer season and the last quarter of the financial year, many brands feel that market sentiments may improve. (SH)

Fibre2Fashion News Desk – India

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