Weddings, improved consumer sentiments to drive apparel sales in coming months: Report
15 January 2025, Mumbai
Driven by the festive season, an increased number of weddings and signs of improving cosumer sentiments, apparel and footwear retailers expect a strong demand in the coming months, as per a report by Phillip Capital.
According to this report, overall consumption in the apparel segment remained steady during Q2 FY25, although growth was muted in July and August. This slowdown was attributed to an early end-of-season sale (EOSS) in June, fewer weddings, and heavy rainfall in several regions.
Sharing a similar positive outlook, the footwear industry saw sales and foot traffic meeting expectations, with momentum continuing into November and December, supported by the wedding season.
In the apparel sector, momentum began to pick 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.
While the festive season began with Durga Puja celebrations in East India, most retailers reported below-expected performance. Local disruptions, especially in Kolkata, dampened demand.
Interestingly, rural markets outperformed urban areas, benefiting from higher disposable incomes due to government policies and lower inflationary pressures.
Value retailers continued to perform well as consumers gravitated toward affordable options. In contrast, premium retailers faced challenges. Despite this, the trend of premiumization persists, with a gradual shift toward organized and branded players.
In the footwear sector, companies with strong domestic manufacturing capabilities have successfully adapted to new BIS standards, giving them an edge. However, brands dependent on imports have faced supply chain disruptions, particularly in the sports and athleisure categories. These challenges have created opportunities for local players to gain a competitive advantage in the near to medium term.
Overall, the outlook for both industries is promising, with retailers anticipating robust demand in the months ahead.
