Weak sentiment hits small apparel brands in Q4: CMAI

Weak sentiment continued to haunt small apparel brands (Rs 10-25 crore) while big brands (over Rs 100 crore) grew in Jan - Mar quarter, a study by the Clothing Manufacturers' Association of India (CMAI) showed. While small brands contribute 44% in CMAI Index, big brands (large and giant) share 35%.

Showing growth momentum from the previous quarter, the CMAI Index stood at 7 point level in Jan - Mar quarter of 2015 as compared with 5.01 point in Oct - Dec quarter. The index, however, showed a growth from the high base of 110.26 point in the Jan-Mar quarter 2014 as the apparel industry had recorded a growth of 10.26% in the previous year. For the full financial year 2014-15, the index witnessed a growth by 7.28 points.

Of course, mid brands performed a little better than small brands, though their performance failed to fulfill expectations.

During Jan-Mar '15 quarter, sales turnover of the apparel industry has grown by 5.4 points. This is reasonably good growth, considering the quarter doesn't include any peak season, being a pre-summer quarter. Of course, the EOSS (end of season sale) is much bigger compared to the June-July period, as winter merchandise is cleared out to make way for summer products.

Meanwhile, nearly 75 respondents out of the 100 surveyed claimed that their brand improved sell through in this quarter. Surprisingly, the maximum number of brands that reported a high sell through of 41% and above were small brands, followed by large brands. However, in percentage terms, large brands contributed almost 30.7% among those who recorded a 41% improvement in sell through. Arrow, which reduced inventory holding this quarter, reveals better planning as the main reason for improvement.

With 82 brands reporting an increase in investments, the quarter reflected good confidence among brands to increase investments for the future. The industry as a whole now needs to introspect and look at improving sell through and reducing inventory holding for healthy growth, while boosting individual sales turnover. However, all the parameters are interrelated and every brand needs to strike a critical balance to improve performance. Fashion being a fad, inventory needs to be constantly refreshed.

Interestingly, none of the surveyed giant brands reported a loss in turnover, while only one large brand reported a loss in turnover. However, small brands continued to be in the negative.