The last 10 years have witnessed the warmest winters in the recorded history of India; globally, 15 of the 16 warmest years on record have occurred since 2001. And businesses all across the world have been scrambling to get a handle on how weather changes have been impacting what consumers eat, drink, drive and entertain themselves with. One sector that’s really been feeling the heat is apparel.
Impacts On The Startups
Winters are getting shorter and warmer, hitting winter wear makers hard, particularly in the key markets of north and north-east India. Over the last two years, winter wear sales in India are estimated to have fallen by at least 10-12%, as per the Clothing Manufacturers Association of India (CMAI).
The collections are getting smaller and fabrics lighter. Woollens are increasingly being ousted from winter wear collections. Logistics are getting disrupted, as is production. There is leftover stock, price-cuts and clearance sales. Margins are under-pressure and revenues are plummeting. But, “there is no record of all this,” says Rahul Mehta, president at CMAI. “No consulting firm or research agency has been tracking winter apparel, let alone the impact of climate change on its sales.”
Of course, India isn’t the only country with shrinking winters. There’s the United Kingdom, where unseasonably warm weather can cost non-food retailers $51.3 million per week for each degree rise in temperature, according to an analysis by Met Office and the British Retail Consortium (BRC). In New Zealand, winter has gotten shorter by a month over the last 100 years, while unseasonably warm European weather has led to the decline in the sales of one of the largest fast-fashion brands Hennes & Mauritz AB, better known as H&M.
All of this impacts business. The Ken spoke to more than half a dozen apparel companies to look into the changes such brands have gone through and the challenges that await these businesses in the near future.
Out with the woollens, in with the linens
The year was 2015, the fifth-warmest year in India since the early 1900s and the first one when distributors of Ludhiana-based apparel brand Monte Carlo saw a drop in sales of woollen sweaters. A first in the company’s 34-year history. While the impact was small, its ripples continued to be felt in 2016; distributors were left with the previous year’s stock. In fact, 2016 was the warmest year in the recorded history of India, and 2017, the fourth-warmest. “The winters in India are down from a five-month period to just two months. Winter temperatures in November are above normal and post-January start rising again,” said Mahesh Palawat, chief meteorologist at weather services firm Skymet.
In the process, outerwear retailers such as Blackberrys, Woodland, Numero Uno and Kapsons have struggled to keep up with the warmer temperatures. While overall winter sales have continued to grow for most brands on account of the high value of winter apparel—a common estimate says that the value of four summer t-shirts equals one sweater—Monte Carlo said that fabrics have undergone a change after 2015. “There are cotton jackets and full-sleeved t-shirts that are being increasingly sold. We have introduced cotton sweaters and now, we are adding linen sweaters to our collection as well,” said Rishabh Oswal, executive director at Monte Carlo.
This fabric phenomenon is not limited to Monte Carlo. Over the last two years, at least 15% of heavy woollens in Numero Uno’s collections have been replaced with lighter ones like cotton and linen, which have been excessively in demand. For instance, sleeveless jackets, an old product of Numero Uno, has seen a sudden rise in demand in recent years, “following which, the company has expanded the product line to accommodate multiple lighter fabrics (such as cotton, linen, and denim),” says Narinder Singh Dhingra, chairman and managing director at Numero Uno Clothing Ltd.
In the case of Bengaluru based-Arvind Lifestyle Brands, 70% of the new fabric is light. Even the heavy cotton jackets are being replaced with some gentler fibres. “There is a higher width of light warm clothes, rather than a wider selection of heavy winter wear,” said Alok Dubey, chief executive officer-lifestyle brands division at Arvind Lifestyle Brands Limited. The company operates five apparel brands—USPA, Ed Hardy, Flying Machine, True Blue and The Children’s Place.
While a lot of this has to do with the weather, the business also has to contend with other changes.