KOLKATA: Readymade apparel sales have bounced back after two years of flat growth with brands, retailers, manufacturers reporting more than 10% growth in last quarter. A stable cotton pricing coupled with removal of 10% excise duty has worked in favour of apparel industry bringing consumers back to the market at a time when inflationary pressure and rising product prices are pinching their pockets.
The rising domestic demand has prompted the country's textile industry to increase production of apparel and also look at Bangladesh to build up sufficient inventory for the festive season which is expected to drive sales further in the second half of the current fiscal.
"The domestic apparel industry is once again back in the growth mode after a lull of two years. In the first quarter there has been an overall growth of around 10% even though the economic parameters are not very bright. The growth has come because consumers are not willing to hold back their purchases any further," said Rahul Mehta, president of the Clothing Manufacturers Association of India.
Apparel makers and retail chains like Turtle, Madura Fashion, Future Group and Spencer's Retail say steady apparel prices this year has induced consumers to undertake purchases and the wedding season too has helped the industry. Apparel brand Turtle director Amit Ladsaria says the brand has grown by 31% in the first quarter (April-June) of this fiscal as compared to the same period last year. "The best part of this growth in sales is that it happened on full price, without any discounts or consumer offers," says Ladsaria.
Allen Solly brand head Sooraj Bhat adds that more serious shoppers are in the market. "The growth is coming from higher conversions and triggered by regular customers who account for almost 40% of the sales. Footfalls are yet to pick up completely," he says, adding the brand has grown sales of like-to-like stores by 26% in the last quarter over same period last year.
Prices have played a key role in bringing back customers to the market. Though the production cost has gone up but the apparel makers have not passed it to the customers bringing them much relief.
Spencer's Retail president & CEO Mohit Kampani says on an average apparel prices is slightly less expensive compared to last year on per unit basis. "The steady prices has made apparel more affordable when other consumer product prices have gone up.This has been a big catalyst," he says. Spencer's Retail has grown by 15% in apparel on a like-to-like basis over last year. Future Group's fashion business too is growing upwards of 20% at the Big Bazaar stores which the company wants to grow further by recasting the business soon, asenior official said.
The total size of the Indian apparel industry is Rs2.4 lakh crore. Of this,Rs1.62 lakh crore worth of garments is consumed in India and the rest is exported. India has also increased its imports from Bangladesh, one of the leading apparel making nations in the world.
The brands say the current end-ofseasonsales has triggered demand to the next growth trajectory. Future Group's Central format last Wednesday recorded its highest ever revenue in a single day based on sales. This has given hope to the brands that the upcoming festive season will report double-digit growth rate over last year.
Spencer's Kampani says brands and retailers into private label for apparels will benefit from the current scenario of Bangladeshfor low-cost sourcing. "The garment manufacturers at Bangladesh are far more flexible now in talking terms and we are evaluating for sourcing," he says.
Bangladesh has a zero duty trade agreement with India for garments exports. In the first two months of the current fiscal, India has imported garments worth $37.08 million, which is up by almost 20% vi s-a-vis the same period in the previous year.
It is learnt that the US, which is the major market for Bangladesh apparel makers, has decided to go slow on sourcing from Bangladesh. The US decision was triggered after a factory building collapsed in Bangladesh in April killing 1,132 garment workers and sparked debate over labour safety and rights in the country.
"Though garment imports from Bangladesh has increased to some extent but that is not a matter of worry. Indian apparel makers have also increased their production," said DK Nair,secretary general, Confederation of Indian Textile Industry (CITI).