This year, the end-of-season sale, which usually starts in the first to second week of July, has started off two weeks early with discounts at major apparel retailers ranging from 25 to 80 per cent. The early sale and steep rebates being indicators of subdued demand.

According to data from ICICI Securities, marketing mailers from different retailers, and personal store checks by this correspondent, Shoppers Stop is offering the most discounts at 62 per cent, followed by Reliance Trends at 41 per cent, Lifestyle at 39 per cent and Aditya Birla Fashion’s Pantaloon at 25 per cent.

Marketing mailers from ethnic retailer Fab India in the second half of June had discounts ranging from 30 per cent to 50 per cent across a range of products both at its stores and on its app. Raymond, which flagged off its end-of-season sale almost in the middle of June, started with a buy-2-get-2 offer on ready-made apparel and is now offering a flat 30 per cent off on select made-to-measure items. Brands such as Biba and Global Desi are offering even higher discounts of 50-77 per cent.

End-of-season sales by retailers usually start in the first week of July and extend till the middle of August to get rid of older stock before the start of the festival season, when shelves are stocked with fresh arrivals with new designs. However, this time the ‘sale season’ has started early.

ICICI Securities said that the early sale was due to a general business slowdown and the higher discounts “are reflective of relative stress in underlying inventory, and hence, maybe a leading indicator of business performance in the near term.” It expects a subdued financial performance by the companies in the first quarter of FY24.

On average, Reliance Trends stores are offering higher discounts on some ethnic brands such as W, Aurelia, and Biba, compared to the discounts on these brands at Shoppers Stop, Lifestyle and Pantaloons.

Westside, operated by Trent, is yet to start its EOSS, and it is expected to kick it off this week.

Revenue decline

ICICI Securities said that its channel checks showed that retailers’ revenue saw a decline of 5-15 per cent during April-May, which are usually popular months for weddings.

Apparel retailers had a weak fourth quarter in FY23 and their commentaries during the earnings call has indicated that the weakness was continuing in the June quarter as well.

In a note last month, US investment bank Jefferies had said that the apparel and footwear sector was experiencing weak demand in the mass segments and in smaller cities, while demand was marginally better in premium categories.

In addition to the muted demand, mass apparel categories were also seeing “elevated competition, both offline and online, and high inventory levels, which may delay a growth rebound.” It added that companies such as Page Industries (which sells the Jockey brand in India), VMart, and Aditya Birla Fashion Retail are likely to see a muted first half in FY24 and any recovery could come only in the second half of the fiscal year.

Traditional retailers who rely more on sales from their physical stores are also seeing intense competition from digital retailers such as Meesho, Flipkart, and Myntra, who have stepped up their activities.

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