Small shirt makers struggle to stay afloat

Menswear segment in India is supposed to be the fastest growing in apparel sector. As per retail consultancy Technopak Advisors menswear is a major chunk of the market with 43 per cent share and is growing at a compounded annual growth rate (CAGR) of 9 per cent. The figures may look very

optimistic but the fact remains the apparel segment as whole has been plagued by the economic slowdown and shirt makers especially the smaller brands can vouch for it. While big brands found it tough to do business in a slow economy, small and medium shirt makers had their own set of woes. Recession, high input costs and price escalation took their toll.

The downside of a recession

During the last few years, the apparel industry in India has witnessed a slowdown mainly due to a global recession. The repercussions were felt in the shirt market as well. The shirt business suffered a major setback reporting less volume of sales. For some brands the slowdown affected sales as cost of production went up and price of the product increased which impacted sales. Demand for high end products started decreasing. An increase in the cost of yarn was another troubling factor affecting shirt sales.

Interestingly, even though market suffered a bad patch owing to the slowdown, a few small players were able to maintain their figures even though they did not register any growth.

Price rise v/s discount strategy

India has abundant supply of raw materials and labour to cater to the enormous opportunities in the domestic and exports market. However, retail operation cost did contribute to a price rise. The whole apparel sector was hit by shrinking profits due to a hike in cost of raw materials that left shirt brands and retailers with few options but to pass on the burden to consumers.

The shirt market is flooded with brands being launched from smaller cities such as Vijayawada, Hyderabad, Indore, and they have captured the market. Every region is coming up. And as the market is growing some brands are doing good numbers and cannibalising others’ share, say experts. There are too many shirt manufacturers. Earlier, Mumbai had some value. Now Bangalore does business twice as much as Mumbai. Ahmedabad is not far behind and other cities have got in into the act. Overall small and medium players in the shirt’s segment faced the worst compared to the bigger brands. Will the festive season ahead, change their luck?