After two consecutive years of sluggish growth, the value fashion segment has shown strong signs of recovery, with average sales per square foot (ASPSF) surpassing pre-Covid levels for the first time in Q1 FY2025. The sector has seen a surge in activity, with major corporate players either entering the space or significantly expanding their presence, signaling a promising future for value fashion.
While the premium fashion segment reported a contraction of 3% in ASPSF during FY2024 and Q1 FY2025, the value segment outperformed expectations, surpassing pre-pandemic sales levels in the first quarter. Tata’s Trent Retail, which operates the popular value fashion brand Zudio, posted remarkable growth, with revenue surging by 56% in Q1 FY2025 and profits increasing by a staggering 126.3%.
Zudio’s record-breaking expansion in FY2024 played a significant role in this recovery, with the brand opening 203 new stores and entering 46 new cities, bringing its total store count to 545. The brand’s focus on reducing lead times and ensuring fresh collections hit stores quickly has been a game-changer, positioning Zudio as a strong competitor to Landmark Group’s Max.
Shoppers Stop has also made a bold move by launching its new value format, Intune, in the mass premium segment, with plans to open 60 new stores in FY2025. The success of Zudio has caught the attention of other retail giants, with Reliance Retail launching its own value fashion format, Yousta, and reportedly in discussions with British affordable fashion retailer Primark to bring the brand to India.
The Indian fashion retail industry is optimistic about a continued demand recovery, especially as the festive season approaches in Q3 FY2025. With network expansion driving revenue growth of around 14-15% in FY2025, according to ICRA, fashion players are expected to make capital expenditures totaling ₹2,240 crore in FY2025, a 20% increase compared to last year.
The value fashion segment’s revival has reignited hope in the long-term prospects of the Indian fashion retail industry, with many expecting sustained growth in the coming years.
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