The Indian apparel sector is signaling a possible slowdown for the upcoming financial quarter, as indicated by insights from ICICI Securities, a retail and investment services business. Reports suggest that several brands in India reported minimal growth in the third quarter of the 2024 financial year, prompting them to commence their end-of-season sales sooner than usual.
ICICI Securities highlighted that the increased discounts observed are indicative of underlying inventory stress, potentially foreshadowing the near-term business performance.
Over the past six to eight months, many apparel retailers have resorted to price reductions and significant discounts to clear unsold inventory. Despite certain categories witnessing price hikes due to elevated raw material costs in the past year, not all consumers were willing or financially able to spend more, leading to accumulation of unsold stock for several brands.
To address this issue, numerous apparel retailers in India initiated their end-of-season sales earlier than typical this year. The early days of December witnessed a flurry of fashion retailers offering substantial double-digit discounts on products, aligning their promotions with Christmas or winter festive themes. Additionally, several malls across India incorporated heavy sales promotions as part of their winter festive events.
