Effects of the 2016 demonetisation continue to plague big and small retailers engaged in the denim business. This is coupled with the rolling out of the goods and services tax (GST) and an increase in cotton prices which have apparently had a detrimental effect on their businesses and resulted in losses.

Many retailers claim that their loyal customer bases have been eroded, and the rotation of money become considerably slow. Not only did demonetisation burn holes in their pockets, it also compelled them to use cashless transactions much to their discomfiture.

Bangalore-based Denim Lab India managing partner Vishal Dubey says, “The impact of demonetisation continues to linger in minds of every retailer who are now experiencing a different kind of recession altogether. No cash transactions exist within the system any longer, with wholesalers insisting that transactions be carried online. A retailer is hardly able to earn profits anymore.”

With a sluggish economy providing a backdrop, retailers do not have any other option but to slash prices of denim products. Another retailer, Ahmedabad-based Anant Apparels proprietor Suresh Agarwal says, “Retailers are looking for other means of boosting revenues—by selling large consignments.”

Similar sentiments are shared by Sanjay Soni, owner of Delhi-based Mas Enterprises: “Our turnover has had a cascading effect on other things, and business come to a standstill. It is not just retailers, manufacturers and distributors; wholesalers too are adopting different modes of cashless transactions.” (CV)

Fibre2Fashion News Desk – India

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