Apparel makers, retailers to cut prices by 15%

Tuesday, 15 November 2011

Drop in sales and positive correction in raw material costs have led apparel retailers to take steps to lure customers again. Apparel manufacturers and retailers have decided to cut garment prices by 10 to 15 per cent for the upcoming spring/summer season, which would kick off in February. After the announcement of 10 per cent excise duty on branded garments in the beginning of this year, followed by rising raw material costs apparel manufacturers and retailers were forced to increase prices. Retailers such as Pantaloons and Shoppers Stop raised prices by 8 to 18 per cent. The result was a drop in sales and increased inventory, even the festive season did not bring in cheer. Retail companies witnessed a fall of two per cent in net profits during the first quarter of 2011-12 due to lower volumes and declining same-store sales growth, after the rise in apparel prices and low consumer demand.

Now cotton prices have declines by almost 50 per cent in the last eight months bringing some respite to worried apparel retailers. Though fall in cotton prices would help retailers cut down the rate of finished products, the aim is to increase footfall in the stores.

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