India's consumption slowdown has spread to the innerwear industry, with market players changing strategy to mitigate declining sales. Innerwear companies believe sales in the upcoming festive and winter seasons will show how entrenched the slowdown is in the sector.
Vinod Kumar Gupta, managing director, Dollar Industries said, "I have never seen such a decline in innerwear sales in my career." It looks more like deferment of purchasing at the consumer level and the real test would be the upcoming festive and winter seasons, he added.
He also specified that the slowdown is across the country and not specific to any geographies. Gupta said they believe demand will pick up going forward in the seasons.
A raft of sectors are reeling under the impact of a crushing slowdown. The automobile sector especially is bearing the brunt of a sales slump, but now the slowdown has spread to even innerwear companies.
Dollar Industries expect the topline growth for FY20 to be 12-15 percent compared to 11 percent in FY19.
What are innerwear companies doing to mitigate the slowdown impact?
Ramesh Agarwal, director, Rupa & Co, said the company is trying to offset the slowdown impact with more promotions and marketing. “We are trying to cover up the slowdown in sales from areas where the presence of the company was low or not present. So we can feel the slowdown but it is not visible in the books yet," he added.
A change in strategy, if it helps
Rupa is predominantly into wholesaling but has shifted focus to retail sales as well to beat the slowdown, said Agarwal and so hope to end half-year with double-digit growth.
Agarwal further said that the companies are facing payment delays by retailers/distributors, which is affecting the working capital cycle.
Agarwal said Rupa's advertisement and promotion spend will remain at 7-8 percent and do not expect incremental marketing expenses to impact margins.
First Published: IST