Demonetisation affects shows up on bottomlines

Since demonetisation, textile and apparel manufacturers and retailers suffered a drop in business. Aditya Birla Fashion and Retail, which owns apparel brands such as Louis Philippe, Van Heusen, Allen Solly, Peter England and Pantaloons, lost Rs 100 crores in sales across all its textile business verticals. It posted 4.8 per cent year on year growth in revenue and 8.8 per cent dip in EBIDTA. The company saw a strong start to the festive season till the first week of November 2016, after which the growth trajectory was largely impacted.

Raymond’s textile segment declined during the October-December 2016 quarter mainly due to lower sales volume following a demand contraction. Raymond's wholesale and MBO channels were affected the most due to the cash crunch. Its apparel segment, however, grew in single digits following a recovery in retail sales. The company also opted for cost optimisation initiatives, apart from renegotiating with vendors for a credit period extension.

Monte Carlo Fashions expects to a year-on-year decline in revenues for financial year ’17. Indo Rama Synthetics, India's largest dedicated polyester manufacturer, posted an over 400 per cent increase in losses during October-December 2016. Revenue declined marginally. There has been dumping of polyester fiber from China and other countries for more than a year which has been putting pressure on prices and impacted margins.