CMAI’s Apparel Retail Index indicates buoyant Q4

The Clothing Manufacturers Association of India (CMAI) has launched the ‘CMAI’s Apparel Retail Index’. It’s aimed at assessing the performance of the domestic apparel industry every quarter. The maiden index has analysed the data for January to March quarters of the current year. And

it shows an upward trend in the Relative Retail Index Value.

The relative Retail Index Value has moved north by 10.26 points, compared to the same quarter, last year. Experts opine that the rise in index value indicate a positive trend, which augurs well for the industry because there are no festivals or peak sales season during this quarter. The Apparel Retail Index tests the estimated growth of the domestic apparel retail market every quarter.

Positive growth trends

Individual parameters of the apparel retail index like the sales turnover of brands saw a positive growth of 16.13 points during the quarter and ‘Sell Through’ went up by 15.87 points. ‘Sell Through’ indicates the percentage of fresh stocks sold, without offering discounts. At the same time, ‘Inventory Holding’ went up by 9.05 points, indicating that the overall stocks or inventories with brands were more in the fourth quarter. A decrease in inventory holding reflects a positive performance. ‘New Investments’, showed an increase of 12.24 points.

The sales turnover growth of large brands that fall in the Rs 100-Rs 300 crores bracket was higher at 19.09 points compared to the 7.65 points of small brands, who have a turnover of Rs 10-Rs 25 crores. And the sales turnover of mid brands, falling under Rs 25-Rs 100 crores bracket was up by 17.78 points and giant brands, with turnover above Rs 300 crores reported a high18.93 points. 'Sales Turnover Index Value’ shows that topline growth was high among brands having a high turnover.

While analyzing the feedback of the Apparel Retail Index, it was found that mid brands among the four groups performed the best with the highest Index Value of 1.69 as its ‘Sell Through’ was the highest at 18.46 points and the ‘Inventory Holding’ was the lowest (8.52 points), giving out a positive indication.

Importance of Apparel Retail Index

Over 75 brands participated in CMAI’s first Apparel Retail Index for the fourth quarter of 2013-14. The brands were divided into four groups based on their turnover. Small group comprised of companies with a turnover of Rs 10-25 crores, Mid group had a turnover of Rs 25-Rs 100 crores, large with a turnover of Rs 100-Rs 300 crores and giant those with a turnover of above Rs 300 crores.

The idea behind initiating the Apparel Retail Index was to provide validated information on the sector’s performance based on various parameters. This information holds importance and becomes a guiding force while taking business and marketing decisions.

The research gauged a mix of parameters such as: Sales Turnover, Sell Through (percentage of Fresh Stocks Sold), number of days of Inventory Holding and New Investments in brand development and brand building to assess the performance. While Change in ‘Sales Turnover’, signifies a brand’s Topline Performance, ‘Sell Through’ puts forth the Consumer’s Sentiment; a brand’s operational performance is adjudged by its ‘Inventory Holding’ and an increase in ‘New Investments’ signifies future confidence. It may be added, that DFU Publications, India’s leading B2B publication company, has been appointed to handle the execution of the Research and Data Analysis procedure. DFU will analyze the findings and release an ‘Apparel Retail Index’ every quarter.