Order situation is improving with Indian apparel exporters, but many of them are still struggling with discount pressure on the previously placed orders. And that too up to 50 per cent!
Though buying agencies handling the accounts are doing their best to get relief for the manufacturers, the industry continues to face the heat.
Few Delhi-NCR-based exporters have shared e-mails with Apparel Resources that Matalan, UK which is sourcing through Design Arc Asia Ltd. (associated with the buying giant PDS Multinational Group, having turnover of US $ 1.25 billion) has asked for 50 per cent discount on the few orders.
These orders were placed last year in November-December and supposed to be delivered in March 2020, but at that time, Design Arc Asia Ltd. on behalf of its client had asked them to hold the shipments and now the retailers are asking for discount on the same.
“Due to this pressure we have to bear heavy loss; further these discounts have been asked from only a few suppliers with specific orders,” told a leading apparel exporter who didn’t wish to disclose his name.
Reacting on this issue, Rakesh Chadha, Director, Design Arc Asia Ltd. informed Apparel Resources, “We have been trying our best to fight the corner for factories and begging the retailers to find suitable solutions for the survival of all parties involved.”
He further added that one of his customers has agreed to take the cancelled stock on their repeated requests, where they will be selling these goods through special advertising at a discounted (50 per cent to 70 per cent discount) retail price during the Boxing Day sale and end of season sale. In return, they have requested the factories also to agree to a 50 per cent discount so that they are able to cover at least their raw material cost.
Design Arc in return has agreed to give away its own margin on any such goods in order to help the factories as a goodwill gesture.
“We are trying our best to help the factories recover their losses to the maximum as they will only get 10 per cent of the stock value if they try to job off the stock locally. This has been offered as one of the options and has definitely been a request (not mandatory), in case the factories are able to get a better price from another customer for these goods they still have the option to go ahead with the same after de-labelling the product as per the industry norm,” said Rakesh.
It is pertinent to mention here that Design Arc Asia Ltd. has been sourcing huge volumes from India over the years and never had to face such a situation. It represents some of the leading global retailers and brands and claims that they have unfortunately been hit hard by this pandemic.
