Effects of the November 8 demonetisation that sent consumer confidence and sales plunging until February continue to reverberate across high-street shops and malls, prompting brands such as Zara, H&M, Massimo Dutti to advance their mid-season sale even before the customary winter discounts ran their course.
The head of a global fashion apparel company said, "The situation is bad for everyone. There is too much unsold stock. 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."
Mall owners say sales were down up to 20% in February and the first half of March compared with the same period last year. In New Delhi, Zara and Massimo Dutti already have 50% discounts on various products, while H&M stores have 'midseason sales' offering discounts. The UK's Marks and Spencer is giving customers 50% off on the purchase of a second pair of trousers or T-shirts.
Across malls and outlets, it is raining discounts. Promod has 50% off on a wide range of products, while Tommy Hilfiger is giving a voucher of Rs 9,000 on purchases of Rs 24,999, and Nautica is giving products worth Rs 2,000 free on sales of Rs 11,999.
The head of a company that runs a chain of malls said, "These brands are stretching the sales season in one way or the other. Sales have sharply dropped since February and it is a good 25-30% fall in February and March, compared with the sales of December and January. So, brands are resorting to discounts again."
M&S said, "Although the brands will not acknowledge this, February and March have been pretty bad. Now, there is a lull in the economy, and there is a drag."
Venu Nair, Chief Executive, M&S India, said, "These are planned promotions. It was there last year. We do these promotions to give incentives to consumers to come to the store."
H&M spokesperson said, "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."