Brands offering mid-season sales to come out of note ban pain

In a bid to lift sagging sales following the withdrawal of large-denomination currency notes by the government, a number of branded apparel and lifestyle goods retailers are offering mid-season discounts. The discount sales could well continue into the New Year as retailers are also considering starting end-of-season sales in mid-December instead of waiting till the last week.

On the weekend of December 4, brands such as Mango, Aldo, La Senza, Promod, Kenneth Cole, Steve Madden, Michael Kors and Pepe to name a few, were seen offering discounts ranging from 15 to 70 per cent following a drop in customer footfalls in the aftermath of demonetisation of Rs. 1,000 and Rs. 500 notes.

To be sure, since the first week following the November 8 announcement, when sales dropped by more than half, business has picked up and is about 15-20 per cent lower than that recorded a year ago. That’s small consolation given that retailers had been hoping for a strong December quarter eyeing the Seventh Pay Commission payouts and a good monsoon.

For Major Brands India, partner of brands such as Mango, Aldo and Promod in India, mid-season sales usually end in November with offers up to 30 per cent off on average. This time, however, the brands are still on sale and are offering much deeper discounts of up to 50 per cent on an average. Likewise for India’s largest sportswear retailer, Adidas that has seen a 10-15 per cent hit in its business in November.

Not all retailers are convinced about the discounting strategy. For the last two to three years, end-of-season sales have been starting early in the week of 15 to 22 December in view of the intense competition from online retailers. This year, as the discounts had been lower online, retailers were hoping to start such sales in the quarter starting January.