Apparel retailers are expected to offer large-scale discounts to clear old stocks and also perk up consumer sentiments once the lockdown is lifted, according to industry players.
A series of lockdowns around the world has severely impacted the fashion retail ecosystem as stores all over the world shuttered, resulting in cancellations of late Summer and Autumn merchandise and a build-up of unsold Summer 2020 within the business, they said.
Benetton India Managing Director and CEO Sundeep Chugh told PTI that although "there is certainly no specific discounting strategy post lockdown, as a brand we would want to uplift the sentiments of our consumers through a welcome-back strategy encapsulating season specific offers and engagements at our stores".
Chugh further said,"We anticipate the lockdown would be lifted by/during mid-season, and that's the time when generally mid-season offers prevail and we would mostly align with the same as per the market ecosystem."
Moreover, he said,"Benetton is trying to fully adhere to government regulations and we want to take all decisions in tandem with the government's instructions.
Spykar Lifestyles CEO Sanjay Vakharia also said the situation would depend entirely on how long does the lockdown continue and when the restrictions would be eased.
"Also whether lifestyle businesses will be the last to open or they will open along with the rest is to be seen. But if the lockdown is lifted in this month we may be at the beginning of the Spring Summer season, not necessitating an early end of season sale. However, if opening is delayed, the Spring summer will be on discount then," he said.
Giving a global perspective, Forever New Country Manager Dhruv Bogra said COVID-19 crisis seriously disrupted the global supply chain for fashion early this year.
Leading fashion brands manufacture out of China and Southeast Asia. Just as China began to sputter into action by early March, a series of lockdowns around the world severely impacted the ecosystem of fashion retail as stores all over the world shut down, resulting in cancellations of late Summer and Autumn merchandise and a build-up of unsold Summer 2020 within the business, he added.
As for his company, Bogra said,"Forever New has very swiftly and actively managed its inventory but we expect to be discounting our older merchandise and running exciting promotions on our more recently launched lines, once the malls re-open, in the months of May and June/July."
He further said,"The Autumn-Winter collection will be launched as planned by September but we foresee that promotional offers will continue on select merchandise well into December."
When contacted a Raymond spokesperson said,"As the current situation is highly unpredictable, we have to wait and see how things unfold in the coming weeks. The month of May might witness some consumer promos as brands will try to make up for the lost sales. We do expect an early onset of end of season sales akin to what happened during GST implementation in the country."
A report by IIFL Securities had said apparel players are expected to moderate launches in this season and focus on reducing inventory obsolescence risk. Smaller players are likely to face cash flow concerns as the period of reduced operations elongate.
"This is likely to result in higher discounting in April/May as smaller peers rush to liquidate inventory during the recovery," the report said.
The focus for larger players is likely to be on ensuring that supply chain is ready with new-season launches so as to benefit from potential demand recovery in the second half, it added.
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