Fashion industry is ‘facing the heat’ of note ban this summer

The beginning of a new season is when the fashion industry makes the most benefit, owing to customers’ urge to buy new clothes for the upcoming weather. However, Indian fashion industry has not yet recovered from the shock of demonetisation that happened last year.

The ban on Rs 500 and 1000 notes, announced on November 8, resulted in huge losses to several industries for some time, with customers finding it hard to get hold of new currency. Even though the situation looks a bit settled now, especially after the limit on withdrawal from ATM was lifted, brands like Zara, H&M, and Massimo Dutti continue waiting for customers, forcing them to announce sales and discounts.

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While Zara and Massimo Dutti have offered 50% discounts on various products in their Delhi stores, H&M stores have started midseason sales and discounts. Marks and Spencer, on the other hand, is giving customers 50% off on second purchase.

"The situation is bad for everyone. There is too much unsold stock," the head of a global fashion apparel company told ET. "This is the first time that the midseason sale is happening in March. It always takes place in May. There is about a 20% impact on business compared with last year. January was okay because of the end-of-the season sales."

As per mall owners, sales were down up to 20% in February and the first half of March as compared to last year.

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However, brands are denying that demonetisation has had much impact on their business. "The mid season sale is part of H&M's global strategy in between seasons to sell out transitional garments as we move to the new season, and there is nothing unusual about this," said an H&M spokesperson.

(Image source: Freeclues)