Domestic rating agency ICRA in its latest report has showed that the second wave of coronavirus infections reported from various pockets of the country has come as a ‘strong headwind’ to fashion retailers, and is expected to delay the recovery back to pre-COVID-19 levels till FY23.
According to the report, the industry is set to show a revenue growth of 23-25 per cent on a low base in 2021-22, but that will not be sufficient to get the business performance back to the pre-COVID-19 levels. It said the industry was recovering well till the second wave hit and sales had touched over 70 per cent of pre-COVID-19 levels by the December quarter of 2020.
The rating agency further said that the fashion retailers industry is set to invest Rs 2,400 crore in capital expenditure in 2021-22, largely on store expansions that got deferred as a result of the pandemic, and added that attractive rentals are a pull.