In a break from the recent trend, retailers, led by Kishore Biyani's Pantaloon Retail (India) Ltd, Raheja-owned Shoppers Stop Ltd and the Lalbhai Group's Arvind Ltd, are experiencing strong growth in the fashion segment, thanks to positive consumer sentiments during the current festive season.
Pantaloon is seeing double digit growth in the same-store sales across its fashion segment, which includes Central, Brand Factory and Fashion at Big Bazaar.
"It might be one of the best September-December seasons in the fashion business. Fashion is doing well without offers and discounts. That is the good part about it," said Biyani, founder and group chief executive of the Future group, the parent group of Pantaloon.
Same-store sales growth refers to sales growth coming from stores, which are in the business for a year or more. Last year, Pantaloon saw single-digit growth in its lifestyle segment in the first and second quarter sales.
It was the same case with Shoppers Stop. The company saw 5 per cent growth in like-for-like (LFL) sales in the second quarter compared to a mere 1 per cent growth in the first quarter of FY 2013.
"We believe a lot of positive things have happened in the economy which are driving consumption. The growth in stock markets has driven sales in the western region. The positive sentiments have impacted the mindset of the people. When consumers are happy, they tend to buy," said Govind Shrikhande, managing director and chief executive of Shoppers Stop.
For instance, Shoppers Stop's LFL sales growth in the western region dropped by 2 per cent in the second quarter compared to a decline of 11 per cent in the previous quarter.
Shrikhande is now expecting eight to 10 per cent LFL growth in the coming quarters.
"The puja season already showed signs of revival in demand, but this week is a testing week," according to J Suresh, chief executive officer and managing director of Arvind Brand Lifestyles.
What has surprised retailers is the huge recovery in the men's wear segment which was hit hard during the previous quarters.
"Men's wear is selling at full price. Last year, men's wear was not doing well though women's wear sales were strong," Biyani said.
Added Shrikhande: "In the last one year, many brands expanded their range and offered new options to men which has helped the sale of brands," he said.
He said brands such as Tommy Hilfiger, Louise Phillippe and Arrow have introduced a number of sports-inspired casual wear brands.
For Shoppers Stop, the share of men's wear went up to 32.2 per cent in the second quarter this financial year, compared to 31.6 per cent a year ago.
Most retailers did not feel the need to come out with early end-of-the season sales this time around. Last year, almost all retailers came out with discounted sales in late December instead of the normal January sale.
"I don't think retailers will start their sale early this time. When you sell goods at the full price, why will you advance it or give full discounts?" Biyani said. "We are not planning to come out with a sale," added Shrikhande.