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Apparel and Footwear channel checks 

Apparel gaining momentum, while Footwear awaiting GST cut. Value Retail sustained demand momentum

Seasonality weighs on sales, but festive/GST tailwinds building optimism

The retail environment remained muted during the Jul-Aug’25 period, with heavy rains dampening footfalls across categories. Mall footfalls held steadier than high streets, as malls are increasingly preferred over high-street locations, offering greater convenience and enhanced customer experience. Online platforms continue to gain share, supported by wider assortments and discounting, while aggressive offline expansion in the same micro-markets has led to some cannibalization of sales. Despite prevailing headwinds, store managers indicated a demand uptick in Jul-Aug’25, supported by a successful EOSS, which eventually flattened. They anticipate a strong recovery starting late Sep’25 to Dec’25, driven by GST cuts, festivals and weddings. Repeat customers now account for 30-50% of sales across brands, reflecting growing loyalty as footfalls decline.

Branded apparel shows improving momentum in formal wear amid loyaltyled growth

Apparel performance was mixed across brands and formats. Premium brands like Louis Philippe (ABLBL brand) are seeing stronger traction, with high-street stores outperforming malls (on productivity) despite lower traffic. Jul’25 was a strong month for branded apparel retailers, aided by EOSS, which drove healthy traction and strong YoY growth. Aug’25 saw some moderation after EOSS, though demand was better YoY. Sep’25 is expected to be softer due to the Shradh (inauspicious) period, but store managers remain optimistic on footfall and demand recovery with the early onset of the festive season. Overall, mid- to high-single digit LTL growth is anticipated for branded apparel, with premium formats performing better and higher repeat purchases reflecting strong brand loyalty.

Footwear demand remains subdued, though GST cuts and festive season may aid revival

Footwear companies continue to face a prolonged demand slowdown, now persisting for over two years across brands and formats. Jul-Aug’25 performance was further impacted by heavy rains and sales cannibalization from multiple store openings within the same micro-market, leading to fragmented demand. Bata remained the most impacted due to internal structural challenges such as staff rationalization, reduced focus on core categories, and a diluted brand strategy with no clear priority. While sneakers are gaining traction for Bata, the decline in core remains a structural challenge. Metro and Mochi are experiencing store sales cannibalization, keeping company-level sales stable but likely pressuring profitability due to higher overheads. High-street formats continue to outperform malls on productivity, supported by repeat sales and impulse buying, but overall market momentum remains subdued. Store managers sounded cautiously optimistic that the recent GST rate cut and the early onset of the festive season will help lift demand. Yet again we expect a subdued quarter with a decline or low-single-digit LTL growth.

Sustained demand momentum for value fashion retailers; muted LTL growth

Value fashion continues to witness sustained demand momentum; however, LTL growth is under pressure due to cannibalization from nearby own-brand stores and rising competitive intensity. Brands like Zudio, which are facing cannibalization from their own store expansion, are attempting to boost LTL by increasing AOV through cross-selling and up-selling initiatives. Cost optimization measures, including staff rationalization, are being implemented to maintain store profitability. The Intune store that we visited is consistently delivering a robust performance, with store-level LTL growth and a high proportion of repeat customers. The new format from Trent, Burnt Toast, which focuses on the Box Fit collection, is yet to gain traction as per the company’s expectations. Overall footfalls in the value fashion space remain stable, with the primary challenge arising from intensified competition and aggressive expansion impacting sales of older stores.

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