According to ICRA
The fashion retail sector is anticipated to see a 45 per cent increase in time- on- time( YoY) deals in FY23, led by ultraexpensive brands in the metros or league- 1 metropolises. still, the operating profit perimeters( OPMs) are anticipated to remain range- bound at 7-7.3. The retail sector reported a 55 per cent YoY profit growth in 9M of FY2023 due to bettered profitable exertion and an supplement in optional spends. This was backed by nearly 5 million square bases of fresh store space set up during FY20- FY22. The value- fashion member, on the other hand, is facing inflationary headwinds and reported a negative same store- deals growth when compared with thepre-covid period of the first nine months( 9M) of FY2020.
The gross perimeters for the retailers remained largely in line with the FY2022 situations, as the retailers passed on increased raw material costs( led by the increase in cotton prices) to end- consumers. The other crucial cost heads for a retailer include reimbursement, hand costs, and selling/ promotional charges. Retailers proceeded their store expansion plans in FY22, which have continued in FY23 as well. ICRA expects some curtailment/re-calibration in capex spending by value- fashion players in FY2024, while online deals continue to grow, with the waning impact of the epidemic. ICRA expects the share of online deals to increase to 12- 14 of earnings by FY25, but this is doubtful to replace the slipup- and- mortar deals model any time soon.
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