Apparel retail industry clocks 12% like-to-like sales growth

Despite inflationary atmosphere and economic meltdown, major apparel retailers like Shoppers Stop, Arvind Ltd and Promart have pegged a healthy like-to-like growth in the range of 12-15 per cent for the first quarter ended June 30, 2013. Like-to-like growth is the increase in sales from same store in comparative quarters.

According to industry experts, reasons for the considerable growth amidst slowdown include a stable maximum retail price (MRP) to increase in promotional schemes by apparel retailers.

"The raw material prices have also remained stable. Moreover, the impact of excise duty was also not there in the current fiscal thereby bringing down the MRP. In fact, some brands even reduced their prices while others offered promotional schemes and discounts much before the end-of-season discount sale began. This has led to an industry like-to-like growth of 12-15 per cent," said Rahul Mehta, president of Clothing Manufacturers Association of India (CMAI).

While both Shoppers Stop and Arvind posted a 12 per cent growth each in like-to-like store sales, Promart registered a 25 per cent growth in the same.

"The new financial year has started on a positive note for us with a double-digit like-to-like growth of 12 per cent. Our momentum of store expansion continues to be robust with the addition of 20 new stores across all formats this past quarter. 

Shoppers Stop Ltd is well positioned for a steady  growth trajectory and will continue to extend its retail footprint across formats with a keen focus on existing as well as Tier II cities," said Govind Shrikhande - Customer Care Associate & Managing Director, Shoppers Stop Ltd (SSL).

Total stores added by SSL in first quarter include five Shoppers Stop stores, two Home Stop stores, two M.A.C stores, three Clinique stores, two Estee lauder stores, one Bobbi Brown store, three Crossword stores and  two HyperCITY stores.

Almost all major apparel retailers added number of stores during the first quarter of the current fiscal.

Both Arvind and Promart added stores during the said period. For instance, up from 55 stores in March 2013, Promart added another 26 stores during the period to take the total number of stores to 81. "While on an average we clocked a like-to-like store sales growth of 25 per cent which included both old and new stores, the 10-odd stores that have been functioning since last June have seen around 100 per cent like-to-like growth on an year-on-year basis," said Punit Agarwal, promoter and CEO, Promart Retail India Private Limited.

For Arvind, the company has also been able to clock a CAGR in apparel retail at 38 per cent while the second industry best growth rate stands at 24 per cent.

"We have made improvements in retail space and invested behind our brands especially in terms of promotion. This has led to a positive growth in like-to-like store sales of 12 per cent," said J Suresh, MD and CEO, Arvind Lifestyle and Brands Limited.