Apparel August 2019 Apparel August 2019 issue | Page 66

MARKET WATCH
No Festive Cheer for
Apparel Retailers
Indian retailers do not expect a good Diwali this
year. They are moderating their sales targets
due to poor consumer sentiment and sluggish
demand. Large retailers generally place their
orders for Diwali by March or April but now,
production companies fear they might cancel
some orders due to the overall economic
slowdown. Garment suppliers are particularly
nervous about small retailers, who generally place
orders in July—August.
Growth of same-store sales— a retail yardstick
to gauge the performance of outlets that have
existed for a year or more— for organised bricks-
and-mortar retailers has dropped this year to
below five per cent from the usual high single-digit
growth over the years. Sales happen only when
they are led by heavy discounts. One retailer
cut production by 10 per cent at their textile
manufacturing unit to deal with accumulated
inventory. In June, the company also halted
production for a week. Since inventories were not
moving at the required rate, production had to
be halted.
Confidence is so lacking that everybody is
becoming cautious. The thinking is that if the
current growth rate is five per cent, is it possible
to produce at the expected growth of 20 per cent
and pay vendors (who, as a matter of fact, do not
get paid regularly)?
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I APPAREL I
August 2019
Blackstone has infused capital in Future
Lifestyle Fashions. The primary investment
will be through a combination of equity and
structured debt that will fund capital expansion
of the deep-discount retail format, ‘Brand
Factory’. The structured credit line will be
for five years with a fixed coupon and the
equity upside is expected to accrue through
Blackstone’s stake in Future Lifestyle’s
operating company.
Kukoon to Strengthen
India Presence
Womenswear brand Kukoon is planning to
strengthen its presence in the Indian market by
launching its own e-commerce website in the
coming months. The brand plans to partner
with e-commerce websites to boost its sales
and will display its garments at various events
across the country to expand its consumer
base in India. The brand also plans to focus on
the kids’ wear market.
Blackstone Invests in
Future Lifestyle Fashions