Several fashion retailers have asked the government to devise a mechanism to allow companies to get some cash flows stating that they are headed for a “very challenging time”. The retailers also asked for some kind of support in co-sharing of workers’ wages, waiver of rentals and GST reduction.
At a webinar on ‘Impact of COVID-19 on Fashion Business’, Vineet Gautam, Country Head, Bestseller Retail India said, “Cash flows are really challenged, there is no revenue. Unlike Europe and other parts of the world where online was allowed and some operational revenue was coming in, we are not seeing any revenue coming in as even e-commerce is not allowed.”
“The government needs to work on some mechanism to allow companies to get some cash flows in, otherwise we are heading towards a very challenging time in business, where there is no cash coming in but there is continuous cash outflow in the business. Yes, we have responsibility to our people and we are ensuring that in the best way we can,” he explained.
Agreeing with Gautam, Shailesh Chaturvedi, Managing Director & CEO, Tommy Hilfiger Apparels said that in the last month we have zero sale and zero collection and there has been only cash outflow in terms of fixed cost, including salaries of employees.
According to Dalpat Jain, CFO, Vedant Fashions, India should also explore similar ways as the Singaporian government. He said, “In Singapore, the government has waived off lease costs on properties which were in their control plus issued advisories to property owners.”
“On the wage front, India could also look at “co-sharing” like Bangladesh has done by having loans which are available to industries only with 2 per cent interest that too on moratorium and in installments,” added Jain.
Further Jain also mentioned that GST relief must be provided on apparels which currently range between 12-18 per cent. He said that post the health crises, consumers will move to small ticket items and if there is GST relief which could be passed on to them, then it will help in demand creation.
“The hangover of this corona is going to remain for sometime after the lifting of the lockdown. I forsee this continuing at least 12-15 months till the time the vaccine is discovered and in this period the way we service our consumers is going to change,” he added.
On job cuts, Gautam said that Bestseller India is keeping everyone currently on rolls now. “We have not let go of a single person. I think our responsibility is to protect jobs till the time we can manage to. That’s what we are trying to do so that the least impact comes to our people,” he said.
Jain also said that Manyavar has taken a stand that they will safeguard their workers and ensure that livelihood is not impacted in this period.