Gokaldas Exports Ltd., a Bangalore-based garment manufacturer and exporter, has projected a sluggish demand for apparel in the first half of FY24 due to the persistently weak global economy.
The company's management observed in the market analysis that the initial quarter of FY24 witnessed a sluggish global retail market, leading to a substantial drop in imports across major consumer markets such as the U.S., U.K., and the EU. This decline was primarily attributed to an excess inventory situation with customers.
According to apparel import data, there was a noticeable year-over-year decrease of 26% for the U.S. and 20% for the U.K. and Europe in April and May 2023. Sivaramakrishnan/The exporter explained that weak retail demand during the autumn-winter season of '22, influenced by inflationary pressures, elevated interest rates, and a mild winter, led to an accumulation of surplus inventory, which subsequently impacted the uptake for the current year.
Despite the weak demand in the first half of FY24, company expressed optimism about the company's prospects in the second half of the year and the long term as the company is well-positioned to capitalize on opportunities created by favorable developments, such as India's negotiations for a Free Trade Agreement (FTA) with Canada and the EU.
