Trade Resources Industry Views Big Brands Scored an Impressive Growth of 9.98 Points

Big Brands Scored an Impressive Growth of 9.98 Points

In CMAI’s Apparel Index for the July to September 2014 quarter, ‘Big Brands’ scored an impressive growth of 9.98 points, while ‘Small Brands’ reached a meagre 4.24 points.

“In fact, Small Brands low growth impacted the Overall Index Value, which recorded an average 7.96 points growth,” CMAI says.

According to CMAI, high inventories emerged the biggest barrier to growth despite positive consumer sentiment.

“Players’ inability to manage and control inventories to make way for fresh merchandise, heavily impacted sales turnover and profit margins,” it said.

CMAI’s Apparel Index aims to set a benchmark for the entire domestic apparel industry and helps brands in taking informed business decisions.

The Index is analyzed on the basis of four key parameters like sales turnover, sell through or percentage of fresh stocks sold, number of days of inventory holding and investments.

For the reporting quarter, 105 brands shared their responses. Of these, 9 were Giant Brands, 30 Large Brands, 29 Mid Brands and 37 Small Brands.

The Index categorises Giant Brands as turnover above Rs 300 crore, Large Brands with turnover between Rs 100-300 crore, Mid Brands with turnover in range of Rs 25-100 crore and Small Brands with Rs 10-25 crore turnover.

As per CMAI, Small Brands slow growth has impacted the overall index value. But what worked for Big Brands is; good growth in sales turnover and a restricted increase in inventory holding.

Small Brands recorded average growth in sales turnover because of an increase in inventory holding.

However, most players have reported growth in the second quarter of fiscal 2014-15 compared to the same quarter last year.

Many have indicated an overall a reasonable growth quarter, with few signalling negative performance during the quarter under review.

Most retailers plan their inventories well in advance keeping the demand for a particular product, style and pricing in mind.

Old inventory is regulated so that they can quickly make way for fresh merchandise on the racks for the new season. However, the index reflects that only a few managed their inventories well.

Almost 70 per cent respondents said that their inventory holding increased, impacting profitability.

The Apparel Index shows a tremendous improvement in fresh investments. Almost 86 per cent respondents said that they increased investments during the quarter, compared to the same quarter previous year.

Six per cent respondents said they raised investment by more than 41 per cent, 20 per cent hiked investments by 21 to 40 per cent, 60 per cent by 1 to 20 per cent, while 10 per cent said it stayed the same and the rest of 4 per cent saw a dip in their investments.

Among the four parameters, on which players are scaled, the highest growth in value during the second quarter was contributed by Sales Turnover at 5.71 points, while Sell Through at 2.34 points, witnessed a moderate growth.

Source: http://www.fibre2fashion.com/news/apparel-news/newsdetails.aspx?news_id=168927
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Big Brands Notch Impressive Score on CMAI's Apparel Index