CMAI's Ap­parel In­dex

A com­pre­hen­sive re­port on the Ap­parel In­dex for the July to Septem­ber Quar­ter by CMAI

Apparel - - Contents December 2014 -

CMAI’s Ap­parel In­dex, this Quar­ter (July- Sept Q2 FY 2014-15), clearly sets apart the per­for­mance of two sets of brands. First, the ‘Big Brands,’ i.e. those with a turnover of R25 crores and above and se­condly, the ‘Smaller Brands,’ i.e. those with a turnover be­tween R10 - R25 crores. While the for­mer scored an im­pres­sive growth of 9.98 points, Small Brands touched a mea­gre 4.24 points. In fact, Small Brands’ low growth im­pacted the over­all In­dex Value, which recorded an av­er­age 7.96 points growth. The In­dex Value of Large Brands was high­est with 11.65 points amongst the Four Groups of Brands. High In­ven­to­ries emerged as the big­gest bar­rier to growth, de­spite pos­i­tive con­sumer sen­ti­ment. Play­ers’ in­abil­ity to man­age and con­trol In­ven­to­ries to make way for fresh mer­chan­dise, heav­ily im­pacted the Sales Turnover and Profit Mar­gins.

CMAI’s Ap­parel In­dex aims to set a bench­mark for the en­tire Do­mes­tic Ap­parel In­dus­try and helps Brands in tak­ing in­formed business de­ci­sions. The In­dex is an­a­lysed on the ba­sis of Four Pa­ram­e­ters; Sales Turnover, Sell Through (per­cent­age of fresh stocks sold), num­ber of days of Inventory Hold­ing and In­vest­ments (sig­ni­fy­ing fu­ture con­fi­dence) in Brand De­vel­op­ment and Brand build­ing. This time, 105 Brands shared their re­sponses on the Four Pa­ram­e­ters.

Of th­ese, nine were ‘Gi­ant Brands’ (Turnover above R300 Crores), 30 Large Brands (Turnover R100 - R300 Crores), 29 Mid Brands (Turnover R25 - R100 Crores) and 37 Small Brands (Turnover

R10 - R25 Crores).

CMAI’S AP­PAREL IN­DEX AIMS TO SET A BENCH­MARK FOR THE EN­TIRE DO­MES­TIC AP­PAREL IN­DUS­TRY AND HELPS BRANDS IN TAK­ING IN­FORMED BUSINESS DE­CI­SIONS.

POOR INVENTORY CON­TROL AF­FECTS PROF­ITS

Small Brands’ slow growth has im­pacted the over­all In­dex Value but what worked for Big Brands was good growth in Sales Turnover and a re­stricted in­crease in Inventory Hold­ing. Small brands recorded av­er­age growth in Sales Turnover be­cause of an in­crease in Inventory Hold­ing. How­ever, most play­ers have re­ported growth in the sec­ond quar­ter of fis­cal 2014-15 com­pared to the same quar­ter, last year. Many have in­di­cated an over­all ‘Rea­son­able Growth Quar­ter,’ with few sig­nal­ing neg­a­tive per­for­mance dur­ing the quar­ter un­der re­view.

Most re­tail­ers plan their in­ven­to­ries well in ad­vance, keep­ing the de­mand for a par­tic­u­lar prod­uct, style and pric­ing in mind. Old inventory is reg­u­lated so that they can quickly make way for fresh mer­chan­dise on the racks for the new sea­son. How­ever, the in­dex does re­flect that only a few man­aged their in­ven­to­ries well. Almost 70 per cent re­spon­dents said that their Inventory Hold­ing in­creased, im­pact­ing prof­itabil­ity.

PLAY­ERS RE­ALISE THE NEED TO INVEST

The Ap­parel In­dex show­cased a tremen­dous im­prove­ment in Fresh In­vest­ments. Almost 86 per cent re­spon­dents said that they in­creased in­vest­ments dur­ing the quar­ter, com­pared to the same quar­ter, the pre­vi­ous year. Six per cent re­spon­dents in­di­cated that there was an in­crease in in­vest­ment of more than 41 per cent; 20 per cent in­creased in­vest­ments by 21 to 40 per cent; 60 per cent in­di­cated a rise of one to twenty per cent. While 10 per cent said that their in­vest­ments re­mained the same, another four per cent saw a de­crease in their in­vest­ments.

Among the four pa­ram­e­ters on which play­ers are scaled, the high­est growth in value dur­ing the sec­ond quar­ter was con­trib­uted by Sales Turnover at 5.71 points; Sell Through at 2.34 points, saw a mod­er­ate growth. Sim­i­larly, with an in­crease of 2.21 points, in­vest­ments saw mod­er­ate growth but a rise in Inventory Hold­ing at 2.31 points acted as a spoil­sport, re­sult­ing in only medi­ocre growth on the in­dex value. If play­ers had man­aged their in­ven­to­ries well, this num­ber could have been much bet­ter thereby push­ing up the In­dex Value. Sell Through, con­sid­ered an as­pect hav­ing a di­rect im­pact on prof­itabil­ity proved that the quar­ter gen­er­ated more prof­its than the same quar­ter of the pre­vi­ous year for nearly 77 per cent re­spon­dents.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.