Underwear sales indicate that economic recovery is on the horizon

Leading companies such as Industries Pagewho has the rights to the Jockey brand In India, Aditya Birla Fashion and Retail, Arvind Fashions and Rupa & Co. have attested to this in earnings presentations this month. A recovery in underwear consumption, including men’s underwear, is in sight, with green shoots visible in the June quarter. Sentiment has also been boosted by the start of sales through fast-track trading. The so-called men’s underwear index, devised by former US Federal Reserve chairman Alan Greenspan, is said to detect the beginning of a recovery in tough times, marking a turnaround after a slump in consumption. When money is tight, people, especially men, tend to put off buying these essential garments as long as they can – that’s the theory.

Page Industries management told investors that sales have increased thanks to increased footfall on the back of a recovery in demand, as well as measures taken to improve the inventory situation at distribution centres and ensure the availability of new products in stores. Managing Director Ganesh VS cited positive early indicators.

In its June quarter earnings report, Page said: consumer confidence is recovering and is causing greater spending on clothing and accessories.

“The rise of e-commerce “Digital and media platforms have expanded market reach, allowing brands to connect with consumers more effectively,” he said. “The industry is poised for significant growth.”

Underwear sales have been particularly hard hit for more than six quarters, along with a general slowdown demand for clothingPrimary sales, or shipments from companies to distributors, for the industry have stagnated over the past few quarters due to the high level of unsold inventory since the Covid-19 pandemic. Primary sales by volume, or number of units sold, grew last quarter, although at a slower pace than secondary sales.

For Arvind Fashions, the innerwear category is growing at a double-digit pace, faster than the company’s overall sales. Rupa said revenue grew 8% in the April-June period, while volume growth was 9% “supported by strong sales in the economy.” Luxury industries It also reported a 9% increase in volume and revenue last quarter.

VIP Clothingwhich sells brands including VIP and Frenchie, said there were “signs of recovery and growth in the market”. The company said in its management guidance that revenue is expected to grow by 15-20% in the September quarter “due to good visibility on product demand”.

Aditya Birla Fashion and Retail management said that while the innerwear business registered growth last quarter, sports leisure segment Demand for sportswear continues to decline due to high demand during the COVID era, when several new brands entered the segment due to a sudden surge in demand. However, managing director Ashish Dikshit said that even for sportswear, the worst is over and demand is stabilising.

Apart from the men’s underwear index, other macro indicators also point to a recovery. Consumer price index (CPI)-based inflation for July was 3.54%, the lowest in almost five years, although this was accentuated by the base effect. The monsoon is progressing normally, while the Reserve Bank of India said last week that the Indian economy will grow at 7.2% in fiscal 2025.

“Domestic economic activity remains resilient,” Reserve Bank of India Governor Shaktikanta Das said last week. “On the supply side, steady progress in southwest monsoon, higher cumulative kharif sowing and improving reservoir levels augur very well for kharif production. Manufacturing activity continues to gain traction on the back of improved domestic demand.”