BENGALURU: India’s fashion retail industry is looking at reopening only 25 per cent of outlets after the lockdown is lifted, top industry stakeholders who participated in a webinar by the Retail Association of India (RAI) said on Friday.
The coronavirus pandemic has resulted in almost zero revenues for a majority of fashion brands, who are now looking to sell their inventory, cut down on discretionary spends and even layoff staff to stay afloat. High-end luxury brands would be the worst-hit segment in the fashion industry and may even become affordable in the post-COVID environment, experts say.
India’s apparel industry is the world’s sixth largest, pegged at USD 59.3 billion by 2022 by a McKinsey report. More than 300 international brands were expected to enter Indian markets in the next two years, which may also be delayed due to the pandemic situation.
According to analysts, the partial reopening of outlets is imperative, especially since businesses will have to adapt to the new safety standards, take cognizance of the consumer sentiment, skeletal available labour, as well as follow the government guidelines.
"A majority of the fashion retail stores, whether in malls or otherwise, is concentrated in tier-1 cities that are flagged as red zones. Hence, their reopening will have to be done strategically, in a phased manner. In China, where we have nearly 3,000 stores, we saw that the stores reopened during the course of three weeks, after lifting the restrictions," said Vineet Gautam, CEO, BestSeller India.
Analysts are expecting the virus impact on the fashion retail business to linger on for at least a year, with revival expected either around Diwali season or next year. Furthermore, the reinvention of business models with more focus on e-commerce channels and hyperlocal delivery system is expected.
"There are going to be problems related to employees not being able to report to work, pushing the sales of our summer collection inventory and cutting down the production of Autumn wear. Due to such high unpredictability in the markets, the revival will only happen next year," said Tommy Hilfiger India CEO Shailesh Chaturvedi.
BIG brands hit
The coronavirus pandemic has resulted in almost zero revenues for a majority of fashion brands
High-end luxury brands would be the worst-hit segment in the fashion industry and may even become affordable in the post-Covid environment