The ongoing monsoon end-of-sales season for garments and apparel is better compared to last year, with steeper discounts.
The season generally begins in July and is being extended by a week or two. The customer-friendly tilt is due to higher inventories with retailers. The rise in recent months of cotton prices had manufacturers to raise prices; the excise duty on branded garments announced in the Union budget added to the burden. On the other side, consumers were restrained in their purchases due to high inflation. As a result, inventory started building.
This year, Century Mills gave customers a ‘flat’ 50 per cent off on the total bill if they bought four or more apparel. Last year, they had given discounts ‘up to’ 50 per cent. It has given them higher sales. “The reason we are giving better discounts this season is because we want to give our customers a better offer and also give them the opportunity to experience superior quality at lower price,” said a company source.
Sunil Khandelwal, chief financial officer, Alok Industries, confirmed, “Sales this year have been longer by a week or two to finish off the built-up inventory.”
Shoppers Stop has preponed its sales to August 7 from August 15. Govind Shrikhande, managing director & CEO of Shoppers Stop, said: “Everyone has started their sales a little earlier and so are we, to increase the cash inflow. Prices had gone up, which affected sales as well.”
Cotton prices have started falling but fabric makers had procured most of it when prices were high. Despite a 50 per cent fall in cotton prices in recent weeks, new procurement will start only after three to four months, when new cotton comes into the market. During that time, they will have to get rid of the old stocks.
Harish Bijoor, CEO, Harish Bijoor Consults, says,” India is feeling the pinch of higher inventories and lower offtake, which has caused them to offer steeper sales this season. I also believe that lean period sales will be the trend in the future. This will also help increase the cash inflow for retail companies, which was earlier locked.”