Worried apparel retailers prepone discount sale season

Worried single brand retailers such as French Connection, FCUK, Regal, Guess, Puma and Fila have pre-poned the sale season this summer. The brands have gone ahead and started discounted sales in the last week of June, two or three weeks

ahead of the usual schedule to cash in on the current consumer sentiment. They fear that the economic slowdown could further impact consumer demand and sales registers. By the first week of July, most other big brands as well as department store chains such as Pantaloon and Central will kick start their bi-annual sales season.

The gloomy shadows of recession and the impact of excise and raw material continues to haunt these brands, who fear piling up of inventories yet again. In fact, even the holiday season of April-May did not see consumers loosen their purse strings. In the recent past, when buyers stopped responding to offers and discount schemes, retailers cut down on inventories or stock days, or the average number of days the product remains on the shelves before being sold, by 15 to 20 per cent to free the capital investment.

Continuing inflation and high interest rates are still putting the consumer in a dilemma forcing them to stop spending on optional needs. Earlier when retailers held such sales, the old merchandise used to get over within 2-3 weeks, letting them stock new full-price merchandise in time for the festive months, beginning with Durga Puja in West Bengal. But since the slowdown of 2008, retailers are forced to extend the discount season to keep the cash registers ringing.

Experts say, with recession still hampering growth, retailers would have to continue with the early and extended sales period. Even those apparel retailers, whose sale season begins a bit late, are planning to join the rest as they fear losing out on the opportunity.

Other than offering discount sales, retailers are also considering reducing inventory levels and reducing product prices. For instance, Future Group is working on reducing its inventory by ordering closer to the season and planning to reduce prices by 3-4 per cent on an average. The norm in the fashion apparel industry is to place purchase orders six months in advance. Now for 30 per cent of its fashion apparel merchandise the retailer has reduced the delivery time to two to four months in advance. Even DLF Brands has reduced its order size by close to 10 per cent.