Is the end-of-season sale optimism, short-lived?

Apparel retailers are breathing a sigh of relief with their piled up inventories getting cleared due to a positive end-of-season sale. Though the actual profit figures is yet to be out since the sale season is still on, retailers are happy with the

footfall they are receiving compared to the last season.

For instance, DLF Brands, that markets brands including Mothercare, Mango, DKNY, Alcott among others, has witnessed average sales at the brand’s stores but it doubled in the first week of July compared to the same period in June when the discount sales had not started. In fact, many global as well as domestic apparel brands and retailers had announced the sale season, almost three weeks in advance compared to the normal dates of sale period to clear inventories and make way for fresh stocks. Retailers were worried whether customers would throng the malls amid an on-going economic slowdown. After lukewarm sales in May, many brands including Arrow, French Connection and Puma advanced the start of their end-of-season sales to the last week of June instead of the traditional July. A spokesperson for German sportswear brand Adidas AG says the company was expecting double-digit growth at its like-to-like stores during the sales season and it has achieved that target.

The forthcoming festive season is one of the reasons why customers are hurrying to make purchases for themselves as well as for gifting purpose. And in recent times, customers are heavily depending upon announcement of the sale season to grab lucrative deals from the clothing brands.

But what will happen to the fresh stock that would arrive once the sale season is over? Would there be customers turning up to make purchases? Retailers and brands are apprehensive about whether a similar response will continue post-August when most sales are over, since end of season sales according to them cannot be considered as a sign of positive times ahead. And they also fear that with more and more customers waiting to shop during the sale seasons, new inventories would get piled up till the next sale is announced.

So the current optimism seems to be a short-lived phenomenon since overall retail rebound is likely to take a while, say experts. And the BluFin Consumer Confidence Index (CCI) for June dipping to 40.3 (down 1.4 points from May’s 41.7), after rising for five straight months since January, suggests that consumers have turned pessimistic not only about the future of Indian economy but also about the present, pointing at a red signal for clothing retail ahead. Brands will have to be compelling as well competitive. The next two years look tough for retail,” said the apparel chain official.