Increasing retail restrictions lead apparel, other retailers to hold less stock
As the third wave of Covid-19 and the Omicron variant spreads across India, many distributors and retailers of ‘non-essential’ goods, including clothing and footwear, are cutting down their stock levels in anticipation of muted demand.
Many fashion, accessories, electronics, white goods, and smartphone retailers are choosing to stock around 15 days worth of goods in their retail outlets as opposed to around 30 days, ET Bureau reported. This is due to lessons learnt during the first and second wave of the virus when many retailers battled with excess stock which they were not able to sell due to retail regulations.
Clothing and footwear is especially sensitive to excess stock issues as they are seasonal products and when the season comes around again, the trends will have changed. This makes excess stock hard to sell for retailers in the industry. Buying fewer days worth of stock will also free up cash flow for establishments to ensure they do not overspend and run out of funds.
January business is expected to be particularly affected by Covid-19 restrictions, which are now in place to various degrees across the country. The coming weeks will set the tone for the months to come and some hope has emerged as Mumbai reported a drop in positive Covid-19 cases for the past two days.
“We are now moving to getting fresh season merchandise in a phased manner depending on restrictions and sales situation rather than acquiring the entire stock at once,” said TCNS Clothing’s managing director, Anant Kumar Daga, the Economic Times reported. “This way, we can tweak the inventory levels that go into the store and make our stocking system leaner.”
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