As a large part of the Indian population stayed indoors due to the COVID-19, e-commerce emerged as an essential service as fashion customers. Fashion styles like athleisure and relaxed casual wear formed an important part of the COVID recovery trend as customers opted for easy and breathable styles.

An opportunity to explore multi-functional clothes

These evolving circumstances led to a revision of priorities, Smart waist-up fashion became an important element of fashion etiquette with the rise of the video conference call’ culture. The pandemic also gave the industry an opportunity to explore multifunctional clothing besides re-emphasizing the importance of sustainability.

As many customers shifted to Tier II and III cities, the e-commerce sector witnessed the greatest shift across varied cities. Individuals shopped for products like men’s shirts and women’s salwar kameez.

New initiatives by e-commerce companies

Even though restrictions have been lifted, demand for trendy online fashion continues to drive the growth for the e-commerce sector in India, especially in Tier II and Tier III cities.

E-commerce platforms are launching new initiatives to help the customers make the right shopping choices. They have provided regional customers with an option to shop in their preferred languages like Hindi, Tamil, Telegu, Kannada and Marathi.

Look for brighter prospects

Amazon Fashion has launched brand-specific size charts, multiple-angle product imagery and videos, and a new feature, ‘style snap’, an image-based search tool that allows customers to upload an image and get recommendation of products similar to the ones found in the image. This is an addition to a no hassle return policy for fashion products that the retailer provides.

Amazon Fashion has also launched topical storefronts like The Mask store, Spring-Summer’21 store and The Wanderlust store. The retailer continues to expand its value fashion portfolio by offering trending styles at affordable price points from brands like Easybuy, Max fashion, Globus, Honey by Pantaloons amongst others. As the world moves towards normalcy, the sector needs to look out for brighter prospects. It needs to undertake new strategies aligning with the current consumer trends and landscape.

Keebee Organics has launched a new range of sustainable kid’s wear in India. The brand has created 100 per cent GOTS certified organic clothing that confirms the guarantees a socially and environmentally responsible manufacturing process. The collection includes basics and ethnic wear for boys, girls like jablas, dresses, swaddles, towels, kurta sets and lehenga sets.

Vandana Kalagara, Founder says, the company aims to provide options to customers to easy their way into sustainable practices. Its 100 per cent organic clothing supports fair and safe working conditions saves natural resources and reduces the carbon footprint. The company provides complete transparency in production processes to promote minimalism. Founded in 2016, Keebee Organics sells products through its website and e-commerce platforms including Firstcry, Myntra, Little Miffet, Little Muffet, Amazon, etc.

It may take a few quarters for apparel sales to get back to normal, says Gautam Singhania, Chairman and Managing Director, Raymond. Singhania believes, “March will be a watershed month leading to 100 percent recovery”. Sales are improving as more people get vaccinated and step out.

Weekend sales are back to pre-COVID levels as consumers are willing to come out and spend on good things. Rebound in Tier II and III cities is higher as these were less impacted by the pandemic, adds Singhania. The company is present in towns that have 50,000 people and a distribution network that goes to over 500 towns.

Low impact of increasing raw-material prices on apparel business

As raw material pricing forms a lower percentage of the product overall costs, a rise in cotton prices will not impact the company’s apparel business, adds Singhania. He agrees that input costs are increasing and brands have to take this in their stride. Recovery in the apparel business is slow and it may take a couple of more quarters for things to get back to normal, he adds.

Buyers moving away from China

US customers are moving away from China to India, says Singhania. He affirms US customers would look to India as an alternative to China. Businesses in the country are back to pre-COVID and the company has a strong order book, adds Singhania.

In the future, the company aims to recover apparel sales and remains cautiously optimistic. However, Raymond has recovered over 75 percent of physical apparel sales and does not plan to continue with online operations.

Indian retailers are collaborating with brands to set up physical stores where both can house their products. For instance, Fabindia and Hidesign have set up a store in Chennai’s Pondy Bazaar. Others are working to leverage the online opportunity by facilitating deliveries while some are deepening their presence in smaller towns and cities.

Women’s wear retailer FabAlley and Indya plan to explore the brand store model while Benetton India is gearing up to launch an online store. The company also plans to set up brick-and-mortar stores in Tier II and III cities that have recovered faster. For instance, it will set up two more stores in Bihar to take the tally in the state to ten. Of the nearly 40 planned stores for 2021, 10 have been opened.

Select CityWalk has partnered most of retail brands, including premium ones like Chanel and Dior, to facilitate home deliveries. The mall is also introducing a personal shopping service wherein the staff will help customers locate stores that sell the products they require. Inorbit Malls has introduced video shopping and curbside pick-ups for customers reluctant to step out while Oberoi Mall in Mumbai has enabled a tech-backed version of its rewards program.

India is currently in a sweet spot with regards its textile and apparel exports, opined Sudhir Sekhri, Chairman, Promotion, AEPC in a candid, freewheeling webinar interview with Salil Chawla, Director, DFU Publications.

The webinar was organized by the FashionatingWorld and DFU Publications, on the sidelines of Virtual Fashion Tour-Italy, a Virtual Expo. Split over five sessions, the webinar focused on the theme: Fashion Sourcing & Trends during Challenging Times. One session focused on India emerging as the potential souring hub for Europe.

Resilience helps Indian exporters survive

Sekhri, who is also Chairman and Managing Director, Trend Setters Group, shared his views on India’s post-pandemic export scenario and Italy and Europe emerging as a top export destination for Indian apparel.

He said, though India’s textile and apparel exports took a huge hit last year, the resilience of its export ecosystem helped us bounce back.

Europe continues to be India’s top exports destination though exports to Italy have dwindled post-pandemic. Brexit has also reignited India’s hopes of deepening trade ties with the UK, Sekhri feels.

On AEPC’s role, he said the Council played an important role in getting the anti-dumping duty removed in the Union Budget which gave a boost to MMF exports. AEPC also helped in bringing in global technical expertise from Taiwan, Korea. It is also encouraging manufacturers to move away from cotton and switch to MMF garments.

Sustainability, digitization become business imperatives

Sekhri points out while the rest of the world has moved to MMF exports India is still stuck with cotton. The country also does not have a free trade agreement with the European Union which results in a 9.4 percent duty disadvantage compared to Bangladesh and other competing nations, who enjoy duty-free exports, he opined.

He emphasized, sustainability has become a business imperative with more brands pledging to become responsible producers. The pandemic has also accelerated digitization across global supply chains, and this neo-human behaviour change is likely to be permanent, he added.

He also warned re-shoring may encourage textile manufacturers to move production back to their own countries. However, as there is a light at the end of every tunnel, the global crisis too shall pass and India will emerge stronger from this unprecedented human tragedy, he summed up.

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Inspired by international fashion culture, the essence of Duke’s spring/summer collection remains Indian.

Featuring floral and nature-inspired prints with clean cuts, the collection uses light and airy fabrics such as cotton linen, pique, single jersey sub and textured materials to offer customers a wide range of T-shirts, shirts, denim, trousers, tops, jeggings, activewear, sportswear, accessories, and footwear. Aimed at mid-income customers its priced between Rs 425 and Rs 2,499.

Crafted for the free-spirited young fashionistas, the collection offers casual light colors including soft blush, lime green and pale blue blended with strong earthy tones like burgundy and navy blue. The cotton or poly-cotton fabrics are a treat for casual lovers. Menswear collection also offers essentials range comprising tank tops and graphic printed T-shirts in cotton and rayon fabrics.

Soft designs, airy fabrics for a relaxed feel

Known for its clean fittings, Duke relaxes its tailoring for the spring/summer collection by offering softer designs, airy fabrics and relaxed textures. The brand deploys its expert workmanship and craft techniques throughout the collection with superb fits and interesting patterns. Full of strip designs, prints, embroideries around collars, the collection embodies Duke’s passion for precision and quality and offers complete value for money with user-friendly characteristics.

“The range reflects our commitment to meet the needs of modern customers through its sophisticated, bold designs and robust features, says Kuntal Raj Jain, Director, Duke Fashions. “Each garment reflects the vivacity of today’s youth who are our main target audience. We aim to offer complete value for money by launching international designs and styles at affordable rates,” he adds.

Classic colors, graceful styles for authenticity

Duke has also updated its exclusive Militaire collection ’21 for men by adding a wide range of T-shirts, polos, shorts, lowers, bermudas, and accessories. The classic color combination of this collection combined with graceful styling lends a touch of originality and authenticity to the range.

Shaping Indian industry with diverse styles and network

Winner of the President’s Award and three national awards: Excellent Quality Readymade Garments, Outstanding Entrepreneurship, and Quality Garments; Duke is known for standardized fits, superior quality, a wide range of styles. Incepted in Ludhiana in 1966, the brand was also crowned India’s Power Brand in the US. It is known for innovations and product quality, and has widely shaped the Indian hosiery industry. It connects with customers through online operations, over 4,000 MBOs and 400 EBOs across India.

While the entire fashion industry is still reeling under the effects of COVID-19 pandemic, Aditya Birla Fashion & Retail (ABFRL) has managed to outperform peers by focusing on the ethnic wear and inner wear segments.

Media reports say, the company has not only reduced its debt levels but also expanded store network, and ramped up e-commerce offerings.

Ethnic foray to define future success

One major milestone achieved by ABFRL is the 51 per cent stake it recently acquired in Sabyasachi Couture. Besides, the company has tied up with designer Tarun Tahiliani to acquire a 33 per cent stake in Tahiliani’s existing luxury couture business.

As a part of this deal, ABRL and Tahiliani plan to launch a contemporary men's ethnic wear brand. Performance of the new brand will define the success or failure of ABFRL’s five-year vision.

Currently, ABRFL’s share in the formalwear business is less than 55 per cent, with Louis Philippe, Van Heusen achieving 48 and 45 per cent of their revenue from casuals, sports and leisure wear. The share of formalwear in women’s westernwear brand Allen Solly is also limited to just 5 per cent.

Revenue grow to result in higher PAT

As per Economic Times, till December-end 2020, ABFRL had an outstanding debt of Rs 2,593 crore which it managed to reduce to Rs 580 crore by February-end. The company was able to achieve this due to the recent capital infusion of Rs 2,250 crore by various entities in it.

Of this, 1,500 crore was invested by Flipkart while the remaining Rs 750 crore worth was acquired from the recently-concluded rights issue – coupled with the internal cash flows.

From FY13-20, ABFRL recorded a 32 per cent compound growth in its revenue while Ebitda grew by 52 per cent. However, the company’s profit level remained subdued due the COVID-19 led lockdown.

In FY21, the company expects revenues to grow 7 per cent while Ebitda is expected to grow 14 per cent over FY20-23. Revenue growth may also boost the company’s PAT in FY22 as it expects strong growth in Pantaloons and innerwear segment and its pan-India distribution network.

ABFRL’s e-commerce channels are also expected to penetrate newer cities while capital infusion will result in high ROE and ROCE.

Store expansion to boost revenues

From FY 20-26, ABFRL aims to achieve a 15 per cent annual revenue growth with profits expanding 11 per cent, resulting in 3.4 times FY20 Ebitda and pre-tax RoCE of 25 per cent by FY26. The company also expects to generate Rs 1,000 crore FCF with its revenues from innerwear segment growing to Rs 1,500 crore by FY26. Additionally, revenue from ethnicwear segment is expected to reach Rs 2,000 crore by FY26 with 11 per cent Ebitda margin. To achieve this, the company plans to expand Peter England Red store network from 300 to 1,000 in the next three years. ABFRL also plans to open 500 Allen Solly Prime stores in next three years.

Bright outlook for new businesses

As per ICICIdirect, new businesses are expected to constitute 22 per cent revenue by FY26 from less than 10 per cent in FY20. Online/omni-channels are likely to grow fastest during the period and make up 8-10 per cent revenue in FY26.

For instance, revenues from Kotak’s ethnicwear business are expected to grow by 4-9 per cent over FY2022-23. The company also expects sales to grow two times of FY2023 sales compared to 2.5 times growth expected by TCNS Clothing during FY2023.

In its recent outlook for apparel retail, India Ratings and Research (Ind-Ra), said India’s organized apparel market is geared for a better business outlook in FY22 as improved consumer confidence, pickup in store expansion and prospects of wider vaccine rollout help the sector rebound.

As per the Ind-Ra report, the apparel segment has been improving with sales recovering to almost 80 per cent of pre-COVID levels during the 3QFY21. Though these retailers are expected to close the current fiscal with a 40-45 per cent dip in business, hey are set to reach FY20 recovery levels in FY22

The ratings agency remains bullish on improved cost structures, liquidity enhancement measures and omni-channel push by key retailers. Interestingly, analysts at Ind-Ra expect cost rationalization measures undertaken by retailers during last year’s crisis to sustain even after business returns to normal in FY22. This will help structurally improve the margin profile of apparel retailers, said Prasad Patil, Analyst

The lockdown and the subsequent shift in consumer habits prompted apparel retailers to slash their inventory forecast, up their presence online and switch to more comfort wear as demand for formal and occasion wear remained muted. While apparel retailers struggled, for food and grocery and electronics retailers, business has fared much better.

After store expansion capex was reduced sharply in the first half of the current fiscal, Ind-Ra expects the pace of expansion for clothing retailers to accelerate in FY22. They will continue to develop their omni-channel capabilities to widen their digital and customer interaction capabilities and thus complement the brick-and-mortar business.

Large organized retailers are reviving expansion plans after COVID-19 disruptions stopped store openings last year. Fashion, fast-food chains and electronics retailers will lead store openings over the next 12 months. Shubhranshu Pani, Managing Director-Retail Services, JLL India says, retail expansion has picked up for value retailers with casual and athleisure doing well. Everybody is focusing on Tier-II and III markets while Tier-I markets are yet to reach full recovery, he adds.

Retailers such as Benetton, Levi’s, Aditya Birla Fashion Retail with brands Louis Phillipe, Allen Solly, Peter England and fast-food chains such as Domino’s and McDonald’s have made progress with store opening plans. Benetton India aims to open 30 to 40 stores this year, says Sandeep Chugh, Managing Director. The retailer is eyeing markets such as Gangtok, Ranchi and Delhi.

Levi’s also overhauled its in-store experience. It undertook a massive store transformation project called RX3—resize, relocate and rejuvenate–for its store network. The result was that it shut 10 per cent of its bottom tail-end stores and opened the exact number of stores by the end of 2020. However, the average size of stores was bigger, locations were better, and the store format was upgraded to the global format, said Sanjeev Mohanty, Managing Director, South Asia, Middle East and North Africa, Levi Strauss & Co.

India’s garment makers have begun to increasingly focus on the online space, says a new CRISIL report. The textiles sector has aggressively adopted digital channels for business prospects with digital adoption growing from barely 20 per cent pre-COVID to 58 per cent currently in the textile sector. A similar trend is being observed in Gujarat as well, where apparel makers are aggressively moving towards online platforms to find buyers, says Rahul Mehta, Chief Mentor, Clothing Manufacturers’ Association of India (CMAI).

As per Gujarat Garment Manufacturers’ Association (GGMA), Gujarat is home to some 7,000 apparel manufacturing units, most of which are SMEs. Manufacturers Iin the state have begun to launch new product lines and fresh collections online as well. Mehta says, several clothing brands and manufacturers have started offering fresh merchandise online instead of merely pushing old stocks because of rising digital adoption by consumers. They also launched a B2B platform in November-end to help manufacturers list their collection online, and tap new buyers.

The platform can help connect buyers from across the country with manufacturers and also enable them to place their orders, adds Mahendra Bajaj, Chairman and Managing Director of an apparel manufacturing company that has developed the platform.