Branded clothes prices may hike again

Just three months after branded garment retailers, which were buckling under high cotton yarn rates, raised prices, it is time for yet another round of hikes — this time on account of the 10 per cent excise duty imposed on these products. The government in its Budget has proposed a levy of 10 per cent on branded apparel. Garment retailers said they may hike prices if the government refuses to roll back the excise duty on branded clothes.

“ In case the government does not roll back the proposed excise duty imposed on the branded garments, we will have no option but to pass it on to the customers.

Customers will have to bear the brunt as retailers have limited options to absorb it,” Pankaj Tibrewal, chief operating officer ( COO), Pantaloons, retail arm of Future Group, told us. “ Retailers are anyway facing challenges like high input costs and high rentals,” Tibrewal said, adding that the price hike may affect the margins of the company in the short term.

He was in New Delhi to inaugurate a new Pantaloons store in South Extension. The company had recently raised its prices and the new stocks are already costlier by about 18 per cent. “ We have hiked the prices of the new stock that has come in the stores that will be available from March. The 10 per cent excise duty announced will be additional. That will affect volume growth and demand,” Kishore Biyani, group chief executive officer ( CEO), Future Group, said last week during one event.

Other groups too, like Shoppers Stop and Trent are mulling price hikes if the levy stays. According to Tibrewal, the companies are now focusing on better customer service to increase the footfalls despite a hike. These services would include improved store formats and added value for customers.

“ We are now focusing on better customer satisfaction. We have initiated programmes like Green Card, which would not only give them additional five per cent discount like other retailers but also provide them services like free home drop of altered clothes, exchange period of 90 days, a facility of shipping across India, so that you can gift Pantaloon products to your friends and relatives,” he said.

Tibrewal said that in the next three years the company plans to double the number of its stores, half of which will be in south India.

“ So far, we have concentrated in north India but our next focus is going to be south India. It does not mean that we will not open stores in north India but our expansion spree in south India will be more aggressive,” Tibrewal said.