Many lifestyle companies are experiencing softness in demand across product categories, as per a report by Motilal Oswal Financial Services. Stores witness liquidation of old inventories and introduce fresh summer collections. Despite a subdued environment, companies are still adding stores at a rate of 10-15 percent.
In January, demand was soft, but February saw some improvement due to the wedding season and extended winter. March is expected to be better, attributed to Holi, Eid celebrations, and election spending. End-of-season sales continued compared to the previous year. Ethnic companies face subdued demand as fewer weddings take place in the quarter, despite more available wedding dates.
According to Motilal Oswal Financial Services, despite the subdued environment, companies are still expanding stores, with V-Mart expected to close some loss-making stores in the upcoming quarter. Raw material costs have stabilized, and companies have passed on these costs to customers by implementing price cuts. Fresh summer collections are rolled out, and price cuts combined with raw material moderation could support demand recovery in the next two to three quarters.
