Retailers pin hope on elections & IPL season

With low consumer sentiment continuing to have a negative impact on apparel retailers and brands, the industry

looking for revival with elections and IPL season in the April-June quarter. They are hoping to cash in on these two events to revive sales. The industry has been reeling under pressure with low consumer buying, rising realty costs, delay in mall openings, high inventory and increasing operating expenses.

However, next quarter is expected to bring double digit growth with retailers hoping to cash in on fresh merchandise that would be introduced in stores in the first week of April, when IPL also kick starts. Provogue, for instance expects the extended holiday season around the April-June period to attract footfall and boost sales.

Stores have seen five per cent or flat sales and low footfalls during the quarter on the back of extended discount season. Even now, brands and retailers are forced to offer schemes and discounts to keep the cash registers ringing. The focus is shifting to Tier-II cities that are showing more momentum. Even the forthcoming elections are expected to revive sales. Experts feel if a stable government is elected, then the overall sentiment would see a positive change.

On the down side, the industry is yet to cash in on these two events. With the IPL moving out of the country and with the Election Commission tightening spending by political parties not many orders have been placed for merchandise. Apparel brands have not been able to earn margins over 5 per cent over political apparel merchandise as against the 15-20 per cent that they used to earn in IPL merchandise.

For stake holders based in Mumbai, Tirupur and Ludhiana, orders for cricketing apparel merchandise that include knitted jerseys, caps, wrist bands and other accessories which offered high margins have declined by around 10 per cent. On the other hand, orders from political parties for apparel merchandise surrounding elections such as caps and T-shirts are also not generating enough margins. Experts fear that earnings from orders for apparel merchandise may fall by 5-10 per cent due to the scenario. Players are now hoping that the second half of the IPL season to be held in India will attract orders.