Indian apparel sector shows signs of post-demonetisation recovery

The Clothing Manufacturers Association of India (CMAI) Q1 apparel index value for April-June in the current fiscal has moved up to 2.77 points compared to the 2.25 figure in the preceding quarter. This offers a sense of positivity about future business and is an indicator of the apparel market recovering post demonetisation, the association said in a report.

Giant brands, the ones with widest retail network, registered 11.00 points, followed by large brands at 4.25. Mid brands scored 3.71 points, while small brands recorded the lowest apparel index of 1.47 points.

The apparel industry, however, faced problems with the implementation of the goods and services tax (GST) from July 1. As a result, most players stopped deliveries and focused on clearing inventories before buying fresh stock.

Giant brands witnessed a 7.40-point growth in sales turnover with fast clearance of goods, while the same for large brands grew by 2.00 points. The sales turnover of mid brands and small brands grew by 2.30 and 1.00 points respectively. With the emphasis being more on liquidation, inventory holding was relatively lesser compared to earlier quarters.

But there is an overall sense of positivity about business with festivals and weddings lined up in the second quarter.

CMAl's apparel index is a tool offering concrete information for investors, industry players, stakeholders and policymakers.

It assesses performance based on four parameters: sales turnover, percentage of fresh stocks sold, number of days of inventory holding and investments in brand development and brand building.