Apparel and Footwear Industry Eyes Promising Outlook Fueled by Festivities and Weddings

Retailers in the apparel and footwear sectors are optimistic about demand surges bolstered by festive seasons and increased weddings. Despite a slow start in early Q2FY25 due to various factors, recent improvements in consumer sentiment, local market strength, and domestic manufacturing adaptations indicate a strong positive trajectory for H2FY25.

Retailers in the apparel and footwear sectors are anticipating robust demand in the coming months, buoyed by festive celebrations, a surge in wedding dates, and signs of strengthening consumer sentiment. According to a report by Phillip Capital, the industry is looking forward to a promising second half of FY25.

The report notes that during Q2FY25, overall consumption in apparel remained steady, although growth was tepid through July and August. This stagnation resulted from an earlier end-of-season sale in June, a drop in weddings, and heavy rains across the nation. However, consumer sentiment showed signs of recovery as the quarter progressed.

The footwear industry shares a similar outlook, with October sales and foot traffic meeting expectations. The positive momentum continued into November and December, further supported by the wedding season, mirroring the trends seen in the apparel sector.

The festive period commenced with Durga Puja in East India, but retailers reported performance falling short of expectations due to local disruptions, particularly in Kolkata. Interestingly, rural markets outpaced urban areas thanks to greater disposable incomes from government policies and reduced inflationary pressures.

Value-driven retailers thrived as consumers opted for affordable choices, while premium retailers faced headwinds. Nevertheless, premiumization trends persist with a gradual consumer shift towards branded offerings. Retailers remain optimistic about H2FY25, expecting festive periods and increased weddings to drive growth.

Footwear companies with strong domestic manufacturing have successfully adhered to new BIS standards, offering a competitive edge. However, brands relying on imports have encountered supply chain issues, particularly in sports and athleisure categories. These challenges have temporarily favored local players. Overall, the outlook for both apparel and footwear industries remains positive, with retailers anticipating strong demand ahead.

(With inputs from agencies.)