Instead of building excess inventory, most brands are entering the festive season with tighter stock positions, quicker product refreshes and more agile sourcing strategies
India’s apparel companies are entering the festive quarter with cautious optimism after a first quarter marked by selective consumer spending, resilient demand in value and premium segments, and continued pressure on discretionary purchases in the mid-market. Rather than chasing volumes through steep discounts, brands spent Q1 tightening operations, improving assortments and sharpening inventory planning as they prepared for what is typically the biggest consumption period of the year.
Rising input and operating costs continued to put pressure on margins, relatively stable cotton prices and disciplined cost management helped maintain margin stability. Lightweight, casual, streetwear-inspired apparel, denim, shirts, oversized T-shirts, polos, coordinated sets and streetwear were among the strongest-performing categories in Q1, with online channels consistently growing.
Instead of building excess inventory, most brands are entering the festive season with tighter stock positions, quicker product refreshes and more agile sourcing strategies to respond to demand while protecting profitability.
“The quarter was largely in line with our internal expectations, with healthy sales growth reflecting steady business momentum across our retail network. Demand remained broad-based, reflecting healthy consumer sentiment and enabling us to largely achieve our planned business targets,” Shivendra Nigam, Chief Financial Officer, Cantabil Retail India, told BW Retail World.
Demand Recovery And Key Categories
While overall demand improved, companies said consumers continued to spend selectively, favouring value-led purchases or premium offerings with clear differentiation. Casualwear and everyday wardrobe essentials dominated sales, while digital channels remained a big biggest growth driver.
At Numero Uno, demand remained concentrated in core categories even as shoppers stayed value conscious. “Shirts and denim held up well for us through Q1, they remain the core of what the customer is buying into. The MRP moderation we did clearly helped on volumes, and we saw good traction from more value-conscious buyers who are watching their spends closely. Channel-wise, e-commerce has been the clear performer and continues to do well for us,” said Jaiwant Singh Dhingra, Director of Marketing and Business Development, Numero Uno.
Industry participants observed a similar trend across the broader sourcing ecosystem. As per Showroom B2B, manufacturers and brands increasingly prioritised dependable execution over aggressive expansion as order visibility improved. “Compared to Q4, the first quarter witnessed a more stable operating environment for the apparel sector, supported by improving buying confidence, stronger order visibility, and healthier sourcing activity from brands and retailers. Denim continued to be one of the strongest-performing categories, while value-driven and core wardrobe categories maintained consistent sourcing activity,” said Abhishek Dua, Co-founder, Showroom B2B.
Across the industry, summer-driven apparel including lightweight casualwear, polos, oversized T-shirts, printed shirts, coordinated sets and streetwear emerged among the best-performing categories, reflecting consumers’ preference for versatile, everyday fashion. Brands also indicated that organised retail, ecommerce and other digital-first channels continued to outperform, while physical stores witnessed a relatively slower recovery.
“In Q1, the categories that performed ahead of expectations were luxury streetwear, premium menswear, graphic tees, accessories, jewellery, caps and athleisure. Chrome Hearts, Stussy, AMI Paris and Alice Meyers saw strong pull from aspirational luxury buyers. Gen Z, young professionals, creators, sneakerheads and fitness-led communities were the strongest cohorts,” stated Devansh Jain Nawal, Co-founder and CEO, Culture Circle.
Cost Discipline, Supply Chain Stability
While demand remained selective, apparel companies spent the quarter recalibrating their operating models rather than relying on deep discounts to drive growth. Across the industry, brands focused on improving sourcing efficiency, tightening procurement, optimising production planning and maintaining lean inventories as input costs beyond cotton, including logistics and chemicals, continued to remain elevated.
“Rising input and operating costs continued to put pressure on margins. Labour shortages emerged as another significant challenge, impacting production schedules and capacity utilisation across several manufacturing clusters. Retailer offtake also remained cautious, prompting brands and manufacturers to adopt leaner inventory strategies and maintain tighter control over procurement and replenishment,” highlighted Santosh Katariya, President, Clothing Manufacturers Association of India (CMAI).
For premium brands, the focus was equally on protecting product quality and improving efficiency rather than pursuing volume-led growth. “Our approach has been to improve operational efficiency rather than compromise on product quality or delivery timelines. We continue to work closely with our manufacturing partners to optimise production planning, reduce wastage and improve inventory efficiency,” said Vijay Manek, Co-founder, The Forbidden Fruit.
This disciplined approach was echoed across the industry. Several brands also indicated they would enter the festive season with calibrated inventory positions and faster merchandise cycles, allowing them to respond to demand without carrying excess stock or resorting to aggressive markdowns.
Growth Hopes On Festive Season
With the festive season approaching and wedding-led demand, apparel companies expect demand to strengthen from August onwards, supported by improved business sentiment, stronger order visibility, and early stocking by brands and retailers. Most companies are preparing with faster product refreshes, calibrated stock levels and sharper merchandise planning.
Katariya added that manufacturers are already witnessing stronger enquiry levels and improving order books as brands build inventories ahead of the festive season. Similarly, Cantabil expects the second half to significantly outpace the first, aided by the End of Season Sale (EOSS), the rollout of its winter collection and the festive and wedding period. Nigam said the company continues to maintain optimum inventory levels without carrying excess stock, enabling it to respond efficiently to seasonal demand while maintaining healthy inventory productivity.
Numero Uno is also entering the festive quarter with a cautious but positive outlook. The company is increasing inventory, accelerating product refreshes and expanding its product options while continuing to strengthen its ecommerce presence. Dhingra said the company expects festive demand and improved footfalls to support volumes, although it remains watchful of selective consumer demand and higher input costs.
“We are optimistic about Q2 because the festive season usually creates stronger demand across the apparel sector. Consumers are expected to spend more on fashion, especially for celebrations and special occasions. Brands are preparing with faster design cycles, fresh collections and better use of consumer insights to respond quickly to changing preferences,” said Rinesh Dalal, Director, JD Institute of Fashion Technology.
While the industry’s outlook has turned more constructive heading into the second quarter, executives agree that the festive season will be the real test of India’s apparel recovery. With consumer spending still selective and cost pressures yet to fully recede, brands are focusing on disciplined execution rather than aggressive expansion.
