Apparel July 2019 Apparel July 2019 issue | Page 77

CMAI’S APPAREL INDEX
to better work allocation. We had better sizes and
availability of these sizes.” Notably, the three brands
quoted above are from Large and Giant
Brands groups.
Almost 25 per cent brands reported a loss in
the sales turnover compared to 26 per cent in the
previous quarter. Except Large and Giant brands,
the other two groups this time reported sales losses.
Paresh Dedhia, owner, Dare Jeans, explains, “The
decrease in the sales turnover was mainly due to
a slowdown in business in the market post Diwali.
There was a substantial decrease in demand also.”
Shyam, President, 109° F, observes, “The reason for
the decrease in the sales turnover for us was mainly
due to the closure of our stores.”
Sell-through recorded an index growth of 1.22 this
quarter, compared to 0.96 of the previous quarter,
still showing pressure on fresh goods sales. The
maximum growth in sell-through was reported by
Giant Brands. Mid Brands, however, clocked in the
lowest value of 0.23. Nearly 49 per cent brands
reported an improvement in sell-through, higher than
46 in Q3. However, sell-through decreased for a few.
As Shyam revealed, “The reasons for the decrease
in sell-through is the growing online business, which
has hampered the offline business up to a point.”
Inventory Holding in Q4 is 1.75 points; this is
higher than 1.6 points in Q3. Almost 61 per cent
respondents across brands said that their Inventory
Holding moved north this quarter, higher than 58
per cent in Q3, a very high number, and this was
responsible for pulling down the overall Apparel
Index value. Increase in Inventory Holding impacts
the overall index negatively. A higher inventory
holding indicates more stocks in warehouses or
shop shelves. The maximum increase in Inventory
Holding was among Mid Brands, causing a low
index value; Giant brands, on the other hand,
showed zero change in Inventory Holding. Dedhia
points out, “Payment cycles have stretched. There is
less rotation of funds in the market.”
However, a few brands also managed to decrease
their Inventory Holding. As Deepak Singhla,
Marketing Head of Cantabil, says, “The decrease in
Inventory Holding for us was because there was an
increase in sales, as store-level sales have gone up.
Hence, there was no deadstock.” On the same lines,
Momaya points out, “Inventory Holding has actually
not increased but has moved. There was more
productivity and hence Inventory Holding has gone
down due to replenishment schemes.”
Overall investments are low for the Apparel
segment this quarter. Fresh investments decreased
to nearly 1.56 points, as against 1.62 points last
quarter. Nearly 73 per cent respondents reported a
rise in investments, which is lower than 81 per cent
in the previous quarter. The highest investments
were done by Mid Brands, followed by
Giant Brands.
AN AVERAGE OUTLOOK FOR NEXT
QUARTER
Around 58 per cent (52 per cent last quarter) brands
say that the outlook for next quarter is Average.
Generally, Q1 of the new fiscal should be better as
fresh summer sales pick up prior to EOSS in July.
However, there is no such excitement as the market
has still not recovered from the earlier slowdown.
Another factor could possibly be the Lok Sabha
elections in Q2 this year, which may have resulted in
expectations of tepid response.
CMAI’S APPAREL INDEX
CMAl’s Apparel Index aims to set a benchmark
for the entire domestic apparel industry, and helps
brands in taking informed business decisions.
For investors, industry players, stakeholders, and
policymakers, the index is a useful tool offering
concrete and credible information, and is an
excellent source for assessing the performance of
the industry. The Index assesses the performance
on four parameters: Sales Turnover, Sell-through
(percentage of fresh stocks sold), number of days of
Inventory Holding, and investments (signifying future
confidence) in brand development and
brand building.
The Apparel Index research is conducted by
DFU Publications.
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