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It’s raining discounts: Shoppers Stop, Only, Tommy Hilfiger, others in mid-season sale mode

The growing concern over the inventory pile-up has led brick-and-mortar and online retailers to announce an unprecedented mid-season sale.

The ongoing mid-season sale is an effort by sellers to not only liquidate the old stock but also the slow-moving items, according to experts. (Image: PTI)
The ongoing mid-season sale is an effort by sellers to not only liquidate the old stock but also the slow-moving items, according to experts. (Image: PTI)

The growing concern over the inventory pile-up has led brick-and-mortar and online retailers to announce an unprecedented mid-season sale. Multi-brand retail outlets such as Max Fashion and Shoppers Stop as well as single-brand players, including Vero Moda, Only, Jack and Jones and Tommy Hilfiger, are currently offering discounts ranging between 30% and 50% on select stocks. “Usually in a year, offline and online retailers hold two large sales during the end of the season. However, this year, despite a pre-GST sale where sellers tried to liquidate old stock, not everything got sold. Add to that a flat festive season. The ongoing mid-season sale is an effort by sellers to not only liquidate the old stock but also the slow-moving items,” said Rajat Wahi, partner (management consulting) at consulting firm Deloitte India. Experts said usually retailers hold stock of around four-to-six weeks, which currently sits at more than eight weeks, indicating higher inventory in the sector. According to industry estimates, the third quarter of a financial year is the most important one, with retailers generating about 30-35% revenue. Retailers too agree that the ongoing sale is a way of clearing the existing inventory. “This year, post-Diwali, brands have gone a little aggressive on discounts as inventory is on the higher side, and many brands are offering discounts as high as 30% to 40%,” said Kavindra Mishra, CEO, Pepe Jeans.

Similarly, multi-brand retail outlets such as Max Fashion are offering discounts ranging between 10% and 20%. “With a rather bad festive season, where customers refrained from spending on clothes and other fashion items, discounts are being offered on those items that did not sell,” said Vasanth Kumar, executive director, Max Fashion. Vineet Gautam, CEO, Bestseller India, which operates brands such as Vero Moda, Only and Jack and Jones, pointed out that while mid-season sale is a regular phenomenon in the US and Europe, Indian retailers are seen adopting it now. “The idea is to a create a new line of fashion every second or third week so that customers continue to buy new things. So, the existing stock is sold at a lesser price by offering discounts to create more shelf space,” said Gautam. As for e-commerce firms such as Flipkart and Amazon, the latter calls the ongoing sale a tactical approach. “These are tactical discounts that we offer on select products on a regular basis.

This is also one of our many initiatives to showcase the wide selection of products we have for our customers across categories,” said an Amazon India spokesperson. Meanwhile, despite providing discount of up to 60% on select items, Harkirat Singh, MD, Aero India, maker of the Woodland brand of products, noted that by giving heavy discounts brands are spoiling consumers. “It starts with one brand giving discounts, rest of the players also follow. But by giving offers too often, we are spoiling the customer as he/she would gradually stop buying fresh stock at maximum retail price (MRP) and would only buy during the discount season, which would have an adverse impact on our margins,” he said. According to Singh, on an average, Woodland generates close to 30% of its revenue from the third quarter of every financial year.

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First published on: 17-11-2017 at 05:09 IST
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