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With the end of festival season in an otherwise difficult year, retailers are bracing for a challenging next few months as consumers curb discretionary spending
With the end of festival season in an otherwise difficult year, retailers are bracing for a challenging next few months as consumers curb discretionary spending

Festivals bring some respite for apparel retailers

  • Pent-up demand during this year's longer-than-usual festival season, followed by the onset of weddings and winters in north India, helped retailers sell apparel after months of struggling to get shoppers back into their stores

New Delhi: India’s top apparel retailers reported 60-90% of last year’s sales this festival season as shoppers walked into stores to buy ethnic wear, children’s garment, and winter and occasion clothing.

Retailers such as Arvind Fashions, V-Mart, Spykar and Biba said pent-up demand during this year's longer-than-usual festival season, followed by the onset of weddings and winters in north India, helped retailers sell apparel after months of struggling to get shoppers back into their stores.

“Festive season was good—we had looked at 75-80%, but we are more towards 85-90% of last year’s levels. It was a good sign," said J, Suresh, MD and CEO at Arvind Fashions Ltd. The company that sells brands such as US Polo Association, ARROW, Tommy Hilfiger, Calvin Klein, Flying Machine, Unlimited and Sephora in India said though its festive season sales beat internal estimates but it was still lower than the previous year.

“Consumption patterns have changed significantly due to Covid-19 but during the festive season things have improved slowly. We have witnessed a spike in sales—online is doing quite well, while physical stores have seen reduced footfall. Business for us was at 60-65% (compared to last year’s festive season sales), though some regions such as part of West India, the city of Bengaluru and Chennai are still quite low in sales," said Siddharth Bindra, managing director, Biba India.

The retailer that sells ethic wear said the festive season aided demand for semi-formal and formal Indian wear after months of selling casual and work-from-home clothing.

Shoppers, said retailers, indulged in more “need-based" buying staying away from unnecessary discretionary purchases. “People have not really shopped for a while, and Diwali also generates a need for newer clothing. So, it's definitely need-based shopping," said Suresh.

Value retailer V-Mart said its festive season sales ended up between 70% and 80% compared to a year ago period. “October was a little colder compared to last year—we had a good winter upswing in sales then. If we see the duration between Durga Puja to Diwali, sales improved month-on-month, but it will take some more time for business to normalize," he said.

Footfall at retailer Spykar’s stores were at 60% compared to last year’s festive period and sales recovery was at last year’s level led by markets in Gujarat, Maharashtra and parts of the Hindi belt. “We are 100-103% of what we did last year at this time. In a lot of cases, we are even 50% better than last year’s numbers. Some markets are, however, not keeping pace with the rest of the country— Bombay and Delhi, for instance," said Sanjay Vakharia, chief executive Spykar Lifestyles Pvt Ltd. The ticket size has been greater as the retailer put out offers to incentivize purchases, he said.

However, for the full year, retailers are expected to report a significant decline in overall sales compared to a year ago period, as the lockdown, and subsequent restrictions on movement, dented shoppers' appetite for new clothes. With employers directing people to work from home and fear of infection limiting social occasions, demand for formal wear took a beating.

In a 9 November survey by the Retailers’ Association of India, apparel and clothing retailers reported a 30% decline in October sales compared to a year ago period. However, last year, Diwali was in October. In September, business for apparel and clothing retailers was down by over 50% year-on-year, RAI said in its 9th edition of the Retail Business Survey.

With the end of festival period in an otherwise difficult year, retailers are bracing for a challenging next few months as consumers curb discretionary spending. For the full year, Spykar’s Vakharia expects business to be down by half compared to a year ago period. Arvind’s J Suresh too said that business lost in the months of the lockdown will be hard to recover.

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