India’s Value fashion sales surpass pre-Covid levels in Q1 FY25

Chennai: After two consecutive years of slowdown, the value fashion segment witnessed green shoots of recovery as average sales per square feet surpassed pre-Covid levels for the first time in Q1 FY2025. The value fashion segment is witnessing heightened activity with large corporates either entering the space or aggressively growing their presence.

While the premium fashion segment reported a contraction of 3 per cent in average sales per square feet (ASPSF) in FY2024 and Q1 FY2025, the value segment surpassed the pre-pandemic levels in the first quarter.

Tata’s Trent Retail, which operates the value fashion brand Zudio, saw revenue surging by 56 per cent in Q1FY25 while the profit saw an impressive hike of 126.3 per cent.

Zudio achieved a record expansion in fiscal 2024, opening 203 new stores and entering 46 new cities, bringing its total number of stores to 545. “With a store footprint of 10,000 sq. ft, the concept affords expansion across numerous micro-markets,” Trent stated in its FY24 annual report. The brand's strategy of minimising lead times, ensuring fresh collections reach stores quickly has been the game changer for it.

It has been giving tough competition to Landmark Group-owned Max. Meanwhile, Shoppers Stop has launched its new value format InTune in the mass premium segment and plans to open 60 new stores in FY25. Impressed by the growth of Zudio, Reliance Retail launched its value fashion retail format Yousta. Reliance is also in discussions with British affordable fashion retailer Primark to launch the brand in India.

As the value segment has become active, the Indian fashion retail industry remains hopeful of demand recovery from Q3 FY2025 onwards led by the festive season. Network expansion shall aid revenue growth of around 14-15 per cent in FY2025, finds ICRA.

Fashion players remain optimistic about the long-term demand prospects of the retail industry. According to ICRA, they are expected to make an estimated capital expenditure of Rs. 2,240 crore in FY25, 20 per cent higher than last year.