Mild winter throws cold water on profits this season

A mild winter in the North has left a dent in the winterwear market. This year sales were 15 per cent below expected levels. In Punjab particularly, sales dipped drastically, affecting the winter gear market which is down 40 per cent as compared to last year. Amritsar, for instance, recorded almost 50 per cent dip in their sales of shawls this year. The annual winter wear market is estimated around Rs 15,300 crores. A report by Technopak Advisors expects the winterwear market to maintain a compound annual growth rate of 8 per cent so that it touches Rs 33,590 crores by 2024.

Not only that, brands that have a strong winterwear segment had to tweak their collections. In fact, brands like Woodland and Marks & Spencer, which have a strong winter wear line, had started selling winter wear in October, a month earlier than usual, expecting people to buy in anticipation of a harsh winter. While several of them replaced heavy woolens with light ones, brands such as Levi’s and Woodland started offering discounts on winter apparel, footwear and accessories as early as December 23. Woodland for example, saw slow demand for bulky winter merchandise, and stocked stores with sweatshirts, fleeces, bomber and gilet jackets instead.

New sub categories do well

The winterwear category is huge. Men’s segment, which includes jackets, sweaters, pullovers, sweatshirts, blazers etc, is pegged at Rs 7,510 crores. The women’s segment, on the other hand, is pegged at Rs 3,290 crores. Both the segments are expected to grow at 8 per cent ad 7 per cent respectively. However, in recent years it’s the demand for jackets that has grown significantly. It has been growing at 20 per cent and there are many established as well as new players in the market. The segment is expected to grow 25-30 per cent in the future. Experts say, around 35 per cent of winter wear market comprises jackets in North India. Growth depends a lot on the season and climatic conditions. Trending this season are wind and ski jackets and we are introducing leather jackets in exotic bright colours which few brands do. Similarly, the shawl market has been growing at around 20 per cent per annum with stoles and scarves pushing up demand. . “This year we are expecting about 13-15 per cent increase in our growth. The sale of shawls depends on climatic conditions. As earlier winter seasons used to be for 3-4 months and now it only last for 1-2 months. Nowadays winter is moderate, so in such climatic condition people demand stoles rather than shawls,” explains Ashwani Kumar Sabharwal , Proprietor, Diva Shawls. Even thermal wear, a winter staple, is growing at around 25-30 per cent. Organised quilted thermal wear segment is about Rs 300 crores while the unorganised one is about Rs 100 crores.

Innovation is the way forward

Every year, manufacturers have to make changes in the winter clothes as per changing tastes and preferences. Innovation is important to stay ahead in the race. As Ramesh Bedi, Director, Palmer points out, “Earlier, outfits used to be heavy and unappealing in appearance, now they are more refined, not only in their look but in their utility as well.” A lot of brands are now experimenting with design and functionality. Even colours are being experimented. As winter is about bright colours, most companies opt for red, green and royal blue shades.

Of late, rise in raw material prices has led to an increase in winterwear prices. The rising cost of yarn, dyes and other raw materials has left manufacturers with little choice but to up their MRPs. Pricing, as we know, is directly proportionate to costs. Monte Carlo, which is a leader in sweaters category, has had to increase its prices. Sandeep Jain, Executive Director, Monte Carlo Fashions, says, “We have always catered to the fashion quotient and have consistently innovated and maintained our leadership position. We have partially absorbed the excess cost in our pricing and partially increased our MRPs.”

A warm winter is affecting the production of winter gear for the next season also. As Swapan Dutta, head, retail sales, Oswal Woollen Mills, Ludhiana, says the production target of a year is derived from the demand and sale registered in the previous year. “With an expected sales dip of around 40 per cent this season, the production of winter gear is expected to dip down by 20 per cent next year.”