Large apparel brands performing better than smaller ones in terms of sales in Q1

YarnsandFibers News Bureau 2015-08-23 15:00:00 – Mumbai

Clothing Manufacturers' Association of India (CMAI's) Apparel Index show that the large and giant apparel brands performing far better in terms of sales than mid level and small brands during the April-June quarter of the current fiscal. Their inventory holding was also lower during the quarter under consideration.

Overall, CMAI's Apparel Index jumped 6.2 points for the June quarter At a 6.2 point growth, the figure is approximately 54 percent higher than the index for small brands (with turnover between Rs 10 crore and 25 crore). Small brands have grown by 4.03 points while mid brands (with turnover between Rs 25 and 100 crore) have grown by 6.75 points. In fact, mid brands performed much better than small brands. But the actual success stories were the large brands (with turnover between Rs 100 and 300 crore), that have grown by 7.93 points and the giant brands (with turnover of above Rs 300 crore), that have a high index value of 10.67 points.

According to the CMAI study, the first quarter Index clearly indicates that large and giant brands are doing much better than small and mid-level ones. The Index pattern this quarter, much like last quarter, reflects that as the size of brands have gone up, the performance has improved. Interestingly, sales turnover also increases in the same pattern and, inverse, in the case of inventory holding. It clearly reflects the impact that sales turnover and inventory have on performance.

But, almost 48 percent of the brands feel that the outlook for the next quarter, from July to September, will be good although the overall apparel industry has failed in maintain growth against the same quarter last year on all aspects. Another main reason which affected the sales turnover was low consumer spending.

Sandeep Jain, Executive Director, Monte Carlo said that their sales turnover grew because of the overall good sale at the retail level.

Among the four groups of brands based on turnovers, giant brands have been growing consistently each quarter. This time, too, giant brands grew the most in sales turnover while their inventory holding did not increase much, whereas small brands' sales turnover grew the lowest and had the highest increase in investment holding. Growing sales turnover, perhaps, explains why giant brands have a strong Index value at 10.67, whereas small brands scored a low 4.03.

Kunal Mehta, Vice President (Business Development and Marketing), Being Human, said that they have increased the number of stores. Their shop in shop (SIS) numbers have gone up and they started vertical distribution and are now available at around 200 member benefit online system (MBOs) in India. They have also increased their e-commerce partners.

While, Suraj Bhatt, Brand Head, Allen Solly, points out that they have made fresh investments this quarter to fund higher sales and retail expansion.

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