Fabric biz facing competition from ready-made garments

Terming the pandemic-impacted April-June 2020 quarter as "the darkest hour of the fiscal", the country's leading player in suiting and shirting Raymond said a recovery in the segment would take a mid-term time frame when life is back to normalcy, primarily driven by occasion- and celebration-led dressing along with ongoing vaccination.

Demand for clothing, which is a non-essential item, with discretionary spending has been impacted, said Raymonds in its latest annual report while talking about branded textiles, its flagship business. It expects modest growth in the fabric business with increasing competition from ready-made garments, besides low traction for the near term in the exports market due to the pandemic.

In 2020-21, sales of branded textiles had declined nearly 46 per cent to Rs 1,572 crore, as against Rs 2,917 crore of 2019-20. While discussing the outlook for the segment, Raymond said: "With vaccination gaining momentum, there is an uptick in consumer sentiments leading to pent-up demand, increased footfalls and higher conversion rate." "Key sales drivers like impending wedding season, festivities and markets reopening fully are expected to amplify demand," it added.

While talking about its branded apparel business, which has four differentiated brands Raymond Ready to Wear (RRTW), Park Avenue, ColorPlus and Parx had witnessed a 71.8 per cent decline in sales to Rs 457 crore in 2020-21 as against Rs 1,619 crore a year ago. "The second wave of the pandemic further dampened consumer sentiments and discretionary spends that are likely to dominate the consumption landscape," it said. Raymond said it is facing challenges such as low consumer sentiments, heavy discounting by players to clear old inventory including on e-commerce marketplaces, and extended end of season sale (EoSS).

Alluring price cuts are also mounting pressure on margins, it added.