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Innerwear, athleisure companies still bet on sops to clear excess stock


Demand for innerwear and athleisure wear continues to remain weak even as excess inventory forced brands to deep discount their merchandise over the past few quarters, leading innerwear makers said. Page Industries, the country’s biggest innerwear maker, said accumulation of excess inventory in the segment has had repercussions on the overall ecosystem, resulting in certain unsustainable business practices in the market.

“It is not only the promotions and discounts, but also the schemes which are being deployed in the marketplace. So, it continues to be that way,” VS Ganesh, managing director of Page Industries said during its second quarter earnings call. “Though we are seeing some positive trends in consumer demand in the economy and rural segments, aided by the onset of festivities, we are yet to witness any noticeable improvement in the urban and mid-premium segment,” he said.

Page Industries, which operates Jockey and Speedo stores in India, posted an 8.4% decline in its revenue and an 8.8% decline in volume for the quarter ended September.

While rivals Rupa and Lux Industries saw sales increase of 6% and 1%, respectively, during the quarter, VIP Clothing posted a 2.4% decline in sales.

The overall sluggish demand suggests that the economy may not be doing well, going by the men’s underwear index (MUI). As per MUI, an economic index conceived by former US Federal Reserve Board chairman Alan Greenspan in the late 1970s, declines in the sale of men’s underwear indicate a poor overall state of the economy while upswings reflect the opposite.

Indian consumers had started reducing non-essential spending such as that on apparel, lifestyle products, electronics and dining out since Diwali last year due to inflation, increase in interest rates, job losses in some sectors such as startups and IT, and a slowdown in the economy. During the quarter ended June, companies had indicated the slowdown is transitional and that they expect to recover by the festive season.The Indian innerwear market, worth $6.3 billion, is estimated to account for 9% of the total domestic fashion retail segment but is highly fragmented and unorganised. Once known as merely an essential wear, the segment saw work-from-home and hybrid work culture along with increasing awareness about health, fitness, and personal hygiene amid the pandemic driving growth.

Buoyed by demand from millennial customers, a host of digital-first brands including XYXX, Damensch, Almo, Bummer and Freecultr have entered the market and disrupted it by either selling lower-priced products or slashing price-tags to gain market share.

Brands attribute the slowdown in demand to a high base, especially for athleisure wear, which saw a demand surge during work from home trend amid pandemic-led restrictions.


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