Worsted? Garment makers see worst fears coming true

A poor marriage season during April-May this year has given sleepless nights to menswear and suit makers such as Raymond and Arvind.

Fewer auspicious wedding dates in the last quarter meant lesser
demand for suit fabrics and garments of these companies, which derive significant sales from the marriage season.

For Raymond, April-May was the poorest in terms of sales due to a temporary dip in consumer sentiment, company officials said on a conference call with analysts.

There are typically two wedding seasons in the country — between April and May and the longer one during November-January.

Amitabh Suri, senior vice-president - marketing, Indian Terrain Fashions, said while April was good in terms of off-take, May was the worst in the last five years and June more promotion-driven.
J Suresh, chief executive officer, Arvind Brands, said demand in May was subdued.

Titan Industries, jewellery and watch major, too, reported slower sales growth last quarter on account of weak consumer demand. Managing director Bhaskar Bhat on an analyst call said poor marriage season led to slower growth in gold jewellery and watches.

Companies are now banking on the delayed festive season that starts with Diwali in November to drive sales.

“Where we would typically see a slow November, due to the postponement of the festive season, we will now see a sluggish October. This will not have a very major impact. We expect the festive season to be in line with the last season. If the demand is lower than the last season, it would be difficult to maintain our high growth rates. We are not expecting any major price hikes in our category of brands,” Suresh said.

“The delay in festive season was already factored in. At an industry level, there seems to be an inventory build-up,” Suri of Indian Terrain Fashions said.

Raymond, which reported a lower-than-expected growth last quarter, expects second half to be much better on account of a strong marriage and festive season from November to January.

“If the forthcoming festive and wedding season does as per our expectation, we will be back in business,” a Raymond official said during the conference call.

The company saw like-to-like or same-store sales declining by 3% during the last quarter, largely driven by discounted sales.
Though inventory levels in its apparel business came down and the company is trying to sell stock as much as possible, especially in brand ColorPlus, it will only be able to get rid of older inventory by January.

Ashesh Amin, founder of retail consultancy, Reach out to India,
said the marriage season was an integral part of sales for makers of shirt and suit fabrics, especially in Tier 2 and 3 towns. It is also a period for companies to launch special collections targeted at the prospective grooms.

“No doubt, consumer sentiment is down and impulse purchases have taken a back-seat. But brands that are innovating are seeing no slowdown,” he said.