Apparel retailers await recovery in demand after a dull festive season and weak

livemint.com:

NEW DELHI : Apparel retailers expect demand to pick up over the next two quarters, after witnessing lukewarm sales in the festival season and winter. A tepid wedding season coupled with a warmer December dragged down demand for clothing, said several top retailers. Consumers are also spending on other discretionary categories such as travel and eating out, straining demand for products such as clothing and electronics.

“2022 saw a huge upswing in demand for apparel because after a long time, i.e. two years of covid, consumers stepped out, went back to malls and consumers bought a lot. As a result, their wardrobes were more or less full.

Increasingly, after covid, clothing is no longer a status symbol. Clothing as a category is now competing with other discretionary products such as electronics and other home-linked EMIs and therefore, you see less demand for the category," said Rahul Mehta, chief mentor, Clothing Manufacturers Association of India (CMAI). Mehta said demand is expected to remain muted in the ongoing year as well.

“May be in the next year the cycle will turn," he said. Apparel and footwear sales in FY23 were down 8.9% after posting a strong growth of 28.6% in FY22, according to the private final consumption expenditure data released by the government for FY23 last month. Meanwhile, a delayed winter in the month of December also led to an inventory pile-up for clothing brands.

“End of season was OK—the entire industry was sitting on a lot of merchandise till December end and getting nervous. We couldn’t really see the weather changing; however, demand shot up in January, but by then, everyone had commenced sales. Hence, profitability was hit as brands liquidated stock," said Sanjeev Wadhwani, consultant,