Indian retail apparel sector projects 8-10% revenue growth - Report
The Indian organized retail apparel sector is expected to grow by 8-10 per cent in revenue this fiscal year, driven by robust demand from a normal monsoon, easing inflation, and the upcoming festive and wedding seasons. A Crisil Ratings report highlights that retailers are adapting their strategies to enhance supply chain efficiency and respond to the rising preference for fast fashion.
Retailers are focused on improving efficiencies at existing stores and managing costs while limiting external debt to sustain operating margins between 7.2 per cent and 7.4 per cent. The mass market segment now constitutes 60 per cent of total sales, up from 56 per cent pre-pandemic, with fast fashion being a key revenue driver.
In addition to the rise in demand for premium clothing during festive periods, the report notes a shift in consumer spending toward travel and luxury goods in urban areas. Consequently, retailers are cautious about expansion in these regions while targeting tier 2 and 3 cities, where organised retail is on the rise. However, overall area expansion is expected to be lower this year, with a projected addition of 2.2 million square feet compared to 3.6 million last fiscal.
