CMAI’s Apparel Index for the third quarter FY 2016-17 shows that the quarter has had the lowest growth, so far, with the overall Index Value at 1.4 points, as compared to the previous quarter, where overall Index Value was 4.64 points. The dismal growth is an outcome of demonetisation that had an impact on all segments and sectors of the Indian economy.
The impact of demonetisation has been felt across the board. However, bigger brands seem to have adapted to the situation and managed their brands’ growth.
Large and giant brands could maintain growth with fast clearance off goods and discounts that increased the sales turnover to 4 and 6.67 points and reduced inventory holding increase to just 0.68 and 1.77 points, respectively.
Comparatively, small and mid-brands lost sales turnover in Q3 by 0.45 and 0.22 points and inventory holding increased for small brands at 2.70 and mid brands at 1.25 points. This had a cumulative impact on sales turnover and inventory holding of overall Index Value as small brands and mid brands outnumber large and giant brands greatly.
However, around 41 per cent of brands feel that the outlook for January-March 2017 quarter in ‘Good’. Another 10 per cent say the outlook is ‘Excellent’. Nearly 42 per cent foresee an average outlook and 7 per cent feel it will be ‘Below Average’.