Google News
spot_img
spot_img

CMAI’s Apparel Index Clocks in 9.15 Points Growth this Quarter

Must Read

CMAI’s has come out with the second Apparel Index for the April-June quarter. The latest Apparel Index reveals that there is a sense of buoyancy and optimism in the apparel retail segment. CMAI’s index assesses the performance of domestic apparel industry every quarter, comparing it with the same quarter in the previous year.

The Apparel Index Value indicates a healthy 9.15 points growth in the segment. This is higher in the first quarter of FY2014-15 compared to the same quarter of scal 2013-14. The positive reflection is that after a long lull, there is optimism among apparel retailers and brands compared to the same quarter last year, when they were bogged down by low consumer sentiment, high raw material costs and other negative factors.

Incidentally, the April-June 2013 quarter was by itself good because the excise duty on branded clothes had just been removed and the mood in the industry was buoyant. Also, in this quarter (April-June 2014) consumer sentiment has been disturbed due to elections. These two together may have contributed to keep growth in single digit points. However, the there is a sense of optimism in this quarter as most respondents have reported growth and control over inventory. And less than 4 per cent, have reported negative performance in parameters like: Sales Turnover, Sell Through and Investments.

Among all the four parameters assessed to arrive at the index, the highest growth in value terms has been in Sales Turnover at 5.97 points, followed by a moderate growth in Investments at 2.40 points, Sell Through was at 2.03 points and quite significant control in restricting Inventory Holding duration increased by just 1.25 point, resulting in a ‘Healthy Growth’ in index value.

Sales Turnover positive

Most respondents point out positive sales turnover growth was due to factors like a rise in consumer spending, end of season sales and an effective response to fresh arrivals displayed along with discounted merchandise. Almost 46 per cent respondents said their growth was between 1-20 per cent; another 25 per cent respondents reported growth between 21 to 40 per cent; and nearly 12 per cent respondents revealed robust 41 per cent growth. For 17 per cent respondents, the Sales Turnover either remained at or decreased marginally.

Sell Through improves, Inventory Holding in check

Sell Through’ too indicated a positive move with almost 96 per cent respondents showcasing improvement, while only 4 per cent indicated a downward trend. Sell Through is an indication of per cent of goods sold at fresh prices, without any discounts, thus, it has a direct impact on profitability. Hence, it proves that the quarter generated more pro ts than the same quarter of previous year for most of respondents.

Inventory Holding gurus reveal that the performance of brands is improving but there is still way to go in terms of reducing inventories to turn pro table. Nearly 24 per cent of respondents said the duration of Inventory Holding had decreased during the quarter and, 55 per cent said it has increased compared to the previous quarter. An increase in Inventory Holding can create a negative impact on profitability because of a rise in interest cost for holding the inventory.

Meanwhile Fresh Investment saw a tremendous improvement. Nearly 78 per cent respondents reported an increase in investments in capacity building, expansion, technology and so on. But this could also include a part of investments made to hold piled up inventories.

Mid Brands emerge winners

Much like last quarter Mid Brands with a turnover of Rs 25-100 crores, were the biggest gainers registering the highest value growth at 3.34 points, where as Giant Brands, with a turnover of above Rs 300 crores had the lowest growth value of 1.33 points.

Latest News

The Luxottica report card for 2022

A look at how the world’s largest eyewear company fared in terms of revenue growth in key regions across...

Login to your account below

Fill the forms bellow to register

Retrieve your password

Please enter your username or email address to reset your password.