Retailers such as Aditya Birla Fashion and Retail, Arvind, and V-Mart are choosing to avoid major discounts in order to boost their profits.
Madura Fashion, which manages brands like Louis Philippe, Van Heusen, Allen Solly, and Peter England, remarkably reduced discounts by 500 basis points in the previous fiscal year to push profitable growth, mostly in the second half and fourth quarter.
Vishak Kumar, CEO of Madura Fashion, clarified to investors that they found their inventory levels adequate enough and didn’t detect much elasticity in discounting. This planned move was part of their efforts to cut costs. Despite the demanding retail environment, with FY ’24 seeing a deceleration in retail sales growth across diverse segments such as apparel and footwear, retailers are devoted to maintaining a careful approach to discounting.
Retailers have indentified the restrictions of constant discounting over the previous year and a half in addressing sluggish demand. V-Mart, mainly focused on smaller towns, has highlighted internal capabilities and sustainable expansion strategies over short-term discounting tactics. Chairman Lalit Agarwal underlined their pledge to maintaining gross margins.
With the easing of COVID restrictions, rise in sales across athleisure wear, apparel, and lifestyle, consumers changed wardrobes after offices reopened, and dining out and socialising increased. This led to 13-24 per cent monthly growth during FY ’23.
Shailesh Chaturvedi, MD at Arvind Fashions shared, “Post-pandemic, nearly all retailers are moving towards a direct-to-consumer model for online sales, which means to have better control over merchandise, assortment, and pricing, ensuing in improved and more sustainable long-term business strategies.”
