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Retailers of apparel and footwear industry are anticipating strong demand in the coming months. Buoyed by the festive season, an increased number of wedding dates, and signs of improving consumer sentiment, the industry is looking forward to a positive second half of FY25, says a report by Phillip Capital.
The report highlighted that in Q2FY25, overall consumption in the apparel segment remained stable, though growth was muted during July and August. This slowdown was attributed to the early end-of-season sale (EOSS) in June, fewer weddings, and heavy rainfall in various parts of the country. It said "Apparel Overall consumption stayed the same in Q2FY25, but consumer sentiment saw some early improvement as the quarter progressed". The footwear industry shares a similar outlook. October sales and footfalls met expectations, and the momentum extended into November and December, supported by the wedding season. It added "H2FY25 outlook for footwear matches that of apparel, with October sales/footfalls meeting expectation". The report noted that in the apparel industry the momentum picked up in early September but was subdued again due to the earlier start of the Shraadh period on September 17, compared to September 29 in 2023. The festive season began with Durga Puja in East India, but most retailers reported below-expectation performance. Local disruptions, particularly in Kolkata, dampened demand. Interestingly, rural markets outperformed urban areas due to higher disposable incomes driven by government policies and lower inflationary pressures. Value retailers continued to perform well as consumers leaned towards affordable options, while premium retailers faced challenges. However, the trend of premiumization persists, with consumers gradually shifting to organized and branded players. The industry remains optimistic about H2FY25, expecting a boost from the festive season and an increased number of weddings compared to the previous year. The footwear industry companies with strong domestic manufacturing capabilities have successfully adapted to the new BIS standards, giving them an advantage. However, brands reliant on imports have faced disruptions in supply chains, particularly in the sports and athleisure categories. These challenges have provided local players with an edge in the near to medium term. Overall, the outlook for both the apparel and footwear industries is promising, with retailers anticipating strong demand in the coming months. (ANI)
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