India Ratings and Research in its latest report has said that the apparel retail sector is likely to witness a 40-45 per cent decline in revenues during 2020-21, and a demand recovery is expected in the festive season this year if COVID-19-related fears subside.
The rating agency said it expects companies in the apparel retail sector to weather the near-term demand volatility and sluggishness through effective liquidity management, while also improving their competitive advantage.
It said a continued countrywide lockdown beyond the second quarter of 2020-21 or a prolonged impact of the COVID-19 pandemic will lead to a further downward revision of revenue. The rating agency said it expects pre-COVID-19 level demand in the apparel retail sector by the fourth quarter of 2020-21, with the impact of COVID-19-led demand erosion gradually declining, and economic recovery accelerating.