Strong festive sales for Levi Strauss, Puma, other fashion retailers

Bengaluru: About half a dozen fashion companies, including Levi Strauss & Co, Arvind Fashions, Shoppers Stop, Marks & Spencer and Puma, said there is strong festive season demand now but they expect apparel segment to reach pre-Covid levels only by March next year.

“We are looking at a more positive trend as we get into the pre-Diwali season,” said Sanjeev Mohanty, managing director – South Asia, Middle East and North Africa, at Levi Strauss & Co. “Since September with Ganesh Chaturthi and Eid, we are seeing an uptick week on week. By Q1 (March), we should start seeing early signs of pre-Covid level recovery for both the industry and Levi’s,” he said.

Unlike most other consumer categories that either recovered or have seen demand surging after the pandemic-induced lockdown, some discretionary products such as clothing and liquor are still struggling to mop up higher sales.

The delayed revival is also due to store closures and halted expansion compared to a year ago when most retailers were aggressively opening outlets.

According to a report by Motilal Oswal Financial Services, apparel retail is far weaker than other sectors, with second quarter average revenues down 45-55%. “Sluggish recovery and sticky inventory is creating liquidity woes,” it said. “Thus, last year’s trend of store additions has reversed to store closures.”

Across retailers, there have been closures of stores that were unprofitable or which saw limited rental reduction, especially at malls.

Things are looking up, though. “Month-on-month growth has improved consistently,” the Motilal Oswal report said.

Ongoing festive season sales is the highest since the pandemic-led lockdown in March, though it is lower than last year.

J Suresh, chief executive of Arvind Fashions, said despite job losses sales have reached 90% of pre-Covid. “This has exceeded our expectation since we were estimating lower demand at physical stores,” he said. “We expect normalcy in another 5-6 months.”

Arvind Fashions sells brands such as Calvin Klein, Tommy Hilfiger and US Polo Assn.

Shoppers Stop, too, said discretionary spends are climbing back with sales mix at about 65% of last year during Durga Puja in the East India market. “By the end of this year, we definitely see these green shoots help the industry inch back,” said Uma Talreja, chief marketing and customer officer of Shoppers Stop.

With several consumers shying away from malls to avoid crowding, online channels are driving bulk of the growth in demand.

“With the rising demand for faster deliveries, M&S has started implementing buy-online-ship from stores,” said James Munson, managing director of Marks & Spencer Reliance India. “It's too early to speculate full recovery,” he said.