Apparel firms to expand as 3rd wave arrives in India
Apparel retailers are planning to add more stores even as the third wave of the coronavirus hits the country.
Large players are ramping up their store footprint to make up for the setback in store additions earlier this fiscal.
The decision to expand was taken after an encouraging second quarter with listed players reporting they have recovered 75-90 per cent of their sales compared with pre-Covid levels.
Analysts said the latest spike in Covid-19 cases may affect fresh plans for stores. Overall, the current fiscal should end up with a higher numbers of stores, they added.
Brokerage Motilal Oswal said most of the well-capitalised large retailers have resumed their aggressive plans to add nearly 15–20 per cent to the store footprint, compensating for the slow additions in the recent past.
Many stores are also under construction which will help to keep up the pace.
The brokerage said Trent has a healthy pipeline of 75–80 Zudio store additions and 35–40 Westside stores in the current fiscal, other players such as Aditya Birla Fashion and Retail Ltd, V-Mart, and Shoppers Stop are expected to have 15–20 per cent growth in store footprint.
In its presentation after the second quarter results, Reliance Retail said it will continue with the rapid rollout of stores apart from other initiatives to restore pre-Covid growth momentum. The country’s largest organised retailer opened 813 stores in the second quarter, which is 2.8 million square feet across various formats, a sharp rise from 123 in the April-June period and a little over 230 in the second quarter of 2019-20.
Aditya Birla Fashion which has a network of 3,264 stores and around 26,841 multi-brand outlets added more stores under the Lifestyle and Pantaloons brands.
Motilal Oswal said the third quarter would see a steady rebound from Covid-19, particularly with growth in the high single digits to the mid-teens over the October–November festive period.
However, December had been sluggish, particularly after the first 10 days because of consumption fatigue after a period of pent-up demand and consumers and local authorities getting sensitized to the Omicron-led rise in Covid-19 cases.