In a recent assessment, ICICI Securities, a prominent retail, trading, and investment services entity, has raised concerns about the Indian apparel industry’s trajectory, signaling a possible financial downturn. The third quarter of the 2024 fiscal year witnessed marginal growth for many brands, prompting an early rollout of end-of-season sales.
According to insights from ICICI Securities’ latest report, accessed via ET Bureau, the increased prevalence of discounts could signify inventory stress, potentially acting as a leading indicator for near-term business performance.
Over the past six to eight months, a considerable number of apparel retailers have strategically implemented price cuts and substantial discounts to alleviate the backlog of unsold inventory. Rising raw material costs in the previous year resulted in price hikes across various apparel categories, contributing to an accumulation of unsold stock as consumer spending faced constraints.
Notably, many apparel retailers initiated early end-of-season sales in December, offering double-digit discounts on products strategically marketed as Christmas or winter festive-themed sales. The integration of sales into winter festive promotional events was a prominent feature in several malls across India.
Optimizing strategies to manage inventory stress remains crucial for sustaining growth in the Indian apparel industry amid evolving market dynamics.
