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CMAI’s Apparel Index for Jan-March 2016 (Q4) indicates that the industry managed to clock in a moderate growth with an overall Index value of 3.79 points. Giant brands (with a turnover of above R300 crore) and large brands (with a turnover of above R100 crore to 300 crore) however, maintained their growth trajectory, even though their pace slowed down as compared to previous quarters.

However, they were ahead of small (with turnovers of R10 crore to R25 crore) and mid brands (turnover of R25 crore to R100 crore). Giant and large brands did better with indicators such as their sales turnover but their sell through was slightly lower than in the previous quarter, according to a CMAI report on apparel index fourth quarter. Much like the previous three quarters, it is the bigger brands who did better in terms of sales turnover. Overall, ‘Inventory Holding’ improved a little over last quarter. Among the bigger brands, it is the large brands who managed better ‘Sell Through’ at 1.38 points as compared to giant brands at 1.29 points in this quarter.

Much like previous quarters, small and mid brands lagged behind with a lower sales turnover and sell through while inventory holding and investment don’t reflect a particular trend. Mid brands, despite having higher inventory holding than small brands, have indicated better index values because of higher points in every aspect.

The Index reflects that large and giant brands have consistently done better. Small brands have grown the least since positive attributes like sales turnover, sell through and investments are not contributing enough and higher inventory holding is slowing down growth.

On the other hand, giant brands have improved on all other aspects except sales turnover over previous quarter. Hence, the index value is lower than in the previous quarter. For mid brands, all aspects were better in the previous quarter. Therefore, there is a significant fall in growth this quarter (5.88 against 7.92). This is also partly why the overall index dipped in Q4. A close look at sales turnover and inventory holding reveals the reason for small brands not growing as much. Inventory holding is quite high at 2.29 points and the improvement in sales turnover is 2.4 points but this improvement is getting largely offset by increased inventory holding.

All indicators, i.e., sales turnover, sell through and investments, reflected a consistent fall in growth value in successive quarters right from the first quarter. The July-September 2015 quarter was the best performing quarter of FY 2015-16 except the inventory holding criterion, which showed a significant improvement perhaps due to the offloading of inventories during the EOSS.


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