Rajeev Sharma, promoter of Mumbai-based garment export firm, Samrat Exports, is a worried man. A Flordia-based retail chain, which buys garments from Sharma’s firm, has asked for immediate delivery of orders for the spring season. “Usually, we get enough time to deliver,” Sharma said. “We have a feeling that companies, which cannot deliver fast will see their orders getting cancelled. The US financial turmoil is making our life miserable.”
Sharma represents a growing breed of small garment exporters whose fortunes are inextricably interlinked to several mid-size US-based retail chains that are facing a substantial drop in sales. Some of these exporters are either closing down operations or terminating expansion plans. In the process, several people are being laid off in cities like Delhi, Bangalore and Mumbai.
US retail chains are reducing their orders since the beginning of the financial turmoil. Even bigger players are not insulated from the crisis.“Our business has been affected as we have been dealing in premium products, the demand for which has come down in the US,” said SK Singhal, president, textile division, Raymond. Raymond is now trying to reduce its dependence on the US market.
Other large players are diversifying into newer markets. Alok Textiles, a Mumbai-based textile major, is focusing on Europe. India has an opportunity in Europe,” said Sunil Khandelwal, CFO, Alok textiles.