Clothing companies see first signs of recovery as offices reopen
NEW DELHI : Clothing companies say they are seeing the first signs of a return to pre-pandemic sales, with consumers entering stores to update their wardrobes as socializing and office work resume .
With the pandemic forcing people to stay at home for nearly two years, consumers have been quick to buy second-hand clothes and formal wear, hitting clothing businesses where unsold inventory has spiked. To be sure, sales of activewear and loungewear have done well as working from home has become the norm.
Retailers said they are now seeing a steady increase in demand for fashion wear and smart casual wear in line with the latest trends.
Venu Nair, CEO and managing director of Shoppers Stop Ltd, said while the pandemic has boosted demand for sportswear, the department store chain is seeing an increase in sales of smart formal and casual wear.
Nair calls this “desktop restart”.
“During the pandemic, athleisure’s contribution to our sales has doubled. Since the previous quarter, we have seen an increase in sales for the formal and smart casual category. We call it the office restart, in which we are now seeing a resurgence in demand for workwear,” he said.
“Consumers are revamping their wardrobes, depending on the reopening of offices and the upcoming wedding season. Formal casuals, and more importantly, should not only come back strongly, but also with 10% growth from the pre-pandemic period,” Nair said.
Devrajan Iyer, managing director of Landmark Lifestyle International’s fashion and footwear retail chain, said his business was also growing in the pre-pandemic period: “Fewer businesses had opened after the second wave; now all service sectors – travel, hospitality, banking – everything is open. Even IT companies are asking people to come back to the office. This has never happened during the last two confinements. It’s not even recovery; we are growing up before the pandemic. This has been the quickest, fastest and most robust recovery we’ve seen.”
With improved mobility and the partial resumption of offices, the demand for smart casual has increased significantly, Iyer said. Over the past four to five weeks, the recovery has been much faster, he added. A recovery was reported for all types of apparel, including casual wear, with athleisure reporting “very strong” sales outside of smart casual wear.
After posting a 40% drop in the last fiscal year, revenue for traditional apparel retailers is expected to grow 20-25% year-over-year this fiscal year, according to a note from Crisil Ratings.
“Less intensive restrictions and the much shorter duration of the third wave have resulted in minimal disruption to the operations of physical retailers. The strong recovery seen in the second and third quarters of this fiscal year and the strong performance expected in the fourth quarter will propel revenues to 75-80% of the pre-pandemic level,” said Anuj Sethi, Senior Director of Crisil Ratings. Wednesday.
Another retailer told Mint on condition of anonymity that demand is returning across all segments. Fashion apparel, in general, was on the rise as consumers entered stores to check out the latest style trends, in addition to trying on new sizes and fits. “Regarding the demand for formal wear, due to the opening of offices and decreasing cases of coronavirus, the demand for formal wear is increasing day by day,” said Shivendra Nigam, Chief Financial Officer of Cantabil Retail. The chain sells casual and formal clothing for men and women.
At the same time, the brand, which has 375 stores in the department, is also deploying its spring-summer collection. “We expect continued growth in the summer and the demand scenario supports activity,” he added.
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