Investors must shun retail apparel stocks over negative operating leverage

To limit the impact on financials, companies have been looking at ways to cut costs by asking for a waiver, or lower rentals, for the duration of the lockdown

Topics
Apparel industry | Retail Industry | Market news

Ram Prasad Sahu 

After a weak March quarter, apparel retailers are expected to face the brunt of the lockdown in the June quarter with revenues falling over 80 per cent as compared to the year ago quarter.

Unlike retailers such as Avenue Supermarts, which mainly sell groceries, apparel retailers have been operating with a minimal number of stores and are held back by ongoing restrictions. In addition to just one month of sales in the quarter, analysts at Antique Stock Broking believe that general trade and e-commerce gained market share at the expense of modern trade as consumers avoided crowded places. ...

First Published: Tue, July 14 2020. 19:32 IST