Worth & Lifestyle trend retailer with 2nd Covid Wave

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Hi-Sunil Fernandes

| Published: Wednesday, April 28, 2021 9:07 am [IST]

Uncertainty over terms and conditions for value & lifestyle fashion retailers threatens a sharp spike in Covid-19 cases and local bans announced by various state governments, although a nationwide bans is currently unlikely to be imposed, according to ICRA in a report.

Given the low base of FY2021 and the gradual improvement in visitor numbers year over year, ICRA estimates fashion retailers will see sales growth of 23-25% in FY2022. While the OPM is expected to improve, it will remain 250 basis points lower from FY2020.

Value & Lifestyle fashion retailer with 2nd Covid Wave

The rating agency estimates that fashion retailers will see a 42-45% yoy decline in sales in FY2021 and the operating profit margin (OPM) will decrease 400 basis points. Shopping malls and non-essential stores closed in most states in the country in the first quarter of fiscal 202.

The outlook for grocery and grocery retailers is stable

Given the essential nature of the business, F&G retailers will have a limited impact on sales due to increased infections, although business operations will continue to be subject to business hours restrictions and local lockdowns restricting sales of general goods during the first quarter of fiscal year 2222, according to ICRA.

Regarding the outlook for the first quarter of fiscal 2021, the rating agency has determined that there could be a surge in demand as consumers panic over uncertainties about inventory levels and the closure of these stores.

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