Erratic winter puts clothing retailers on thin ice for a second straight year

Initial optimism for a bumper season this year compounded the disappointment for retailers. While early signs of a La Niña — a weather pattern typically known for bringing freezing temperatures to India — triggered some early buying in the previous quarter, the season remained unusually mild, leaving stores with a surplus of winter clothing.

Excess rainfall and cyclonic activity during the festive period in parts of eastern and southern India further weighed on seasonal buying, compounding the pressure on winter sales, which are typically front-loaded.

This slump is particularly painful because winter sales are the industry’s largest annual driver. These months coincide with India’s massive wedding season, when spending peaks. Together, they account for roughly 20% of total yearly revenue for apparel companies, according to industry estimates. India’s apparel market was estimated to be worth more than ₹9 trillion in FY25, of which 41% was organised, credit ratings firm CareEdge said in January 2026.

V-Mart: margin over volume

Lalit Agarwal, managing director of V-Mart Retail, said, “Northern India saw a delayed or milder winter initially, leading to dispersed demand for heavy winter wear. Winter demand was definitely delayed a little bit… it didn’t get lost, but it was erratic.” He added that while festive demand held up, “demand visibility was uncertain, particularly in winter-led categories, and we consciously chose to protect margins rather than chase volumes”.

V-Mart’s revenue grew a little over 10% year-on-year to ₹1,126.4 crore in Q3 from ₹1,026.7 crore a year earlier and ₹889.05 crore in the third quarter of FY24, but this growth was largely driven by wedding and festive-season clothing, executives at the company said.

Anand Agarwal, chief financial officer of V-Mart Retail, said despite forecasts of a strong, early winter, “peak winters were delayed across North and West India, leading to a lull post Diwali.” He added, “While the festive period went off reasonably well, winter demand did not pan out as anticipated,” attributing the softer sales to fewer peak winter days and unusually warmer temperatures.

Despite the delayed demand, the company managed to avoid a build-up of unsold inventory during the quarter. “Inventory health remained strong despite the delayed winter, and in some categories, we were even short of inventory,” said Anand Agarwal, indicating that the eventual dip in temperatures led to a sudden pick-up in demand in select winter categories rather than excess stock.

Winter-led assortments continue to account for a sizeable share of the company’s quarterly sales, underscoring its sensitivity to weather patterns. “Winter and pre-winter categories accounted for about 40-45% of the overall mix during the quarter, and this share rose to over 60% during peak winter weeks in December,” said Agarwal during the third-quarter earnings call.

The higher share of winter wear sales during peak weeks helped cushion margins, even as volumes remained below expectations. Lalit Agarwal said the company refrained from aggressive discounting amid uncertain demand. “Higher full-price sell-through during the winter quarter supported margins, as we did not undertake aggressive discounting,” he said.

Vishal Mega Mart: the late recovery

Gunender Kapur, managing director and chief executive officer of rival Vishal Mega Mart, said delayed winters usually force retailers to push promotions to ensure that they don’t carry forward all that merchandise, because the next opportunity to sell it would be the following year.

Despite this, the company’s performance held up, he said, highlighting that winter sales achieved robust double-digit same-store growth for the entire season and the full quarter, effectively overcoming the sluggish demand during December. Kapur noted that demand for winter clothing increased significantly in January, adding, “Winter merchandise is still selling well, both in our stores and in other stores, we believe.”

Vishal Mega Mart reported revenue growth of about 17% to ₹3,670.4 crore in Q3 FY26 from ₹3,135.9 crore in Q3 FY25 and ₹2,623.5 crore in Q4 FY24, largely on the back of wedding and festive-season demand.

Kapur said the company was unsure whether there would be significant unsold winter merchandise at the end of the season, adding that maintaining pricing discipline helped protect profit margins.

“Merchandise that sells in December typically fetches a higher price than January merchandise for winter because sales often begin by late December or early January,” he said. “In our case, there was no problem. We achieved same-store sales growth of over 10%, even with the winter merchandise we purchased for the autumn-winter season.”

V2 Retail: the outlier

In contrast, V2 Retail recorded strong performance in the third quarter, largely driven by winter wear. Revenue surged nearly 60% year-on-year to ₹929.2 crore in Q3 from ₹590.9 crore a year earlier.

This is perhaps because V-Mart and Vishal Mega Mart are more concentrated in north and central India, where winter demand was more uneven this season, while V2 has a stronger presence in eastern and north-eastern markets, including Bihar, Jharkhand, Odisha and Assam.

Managing director Akash Agarwal said the early onset of winter led to a “very good” season for the company. He noted that winter garments typically command a much higher average selling price (ASP) than summer products, which resulted in a visible bump in average bill value during the third quarter, led by higher sales of jackets and sweaters. Agarwal said this high-ASP, high-margin category accounted for the bulk of Q3 sales and was a key driver of the company’s same-store sales growth.

A worsening problem?

Two straight years of sluggish sales because of erratic winters highlight broader challenges around climate change for apparel retailers, which peg their inventory based on weather patterns and demand.

Seasons have always been inherently unpredictable, and retailers have never been able to forecast with certainty how cold or warm a winter will be or how long it will last, said Devangshu Dutta, founder of Third Eyesight, a consulting firm. However, he said that the challenge has intensified over the past 15-20 years as apparel businesses have scaled up and expanded their store footprints nationwide, stretching product development and supply chains over several months.

“No matter how hard you work on the plan, your forecast will always be wrong. You will either overshoot or undershoot,” Dutta said, adding that this leaves retailers grappling with either shortages or excess stock. Winterwear, he said, is particularly vulnerable because it has a higher value per unit, a much shorter selling window, and a smaller market, factors which together create a “humongous problem for retailers”.

Data from a World Meteorological Organisation report published on 16 January showed that 2025 was among the three warmest years on record worldwide, continuing a decade-long streak of exceptional heat despite the cooling La Niña phase. This is a clear sign that background warming from greenhouse gases is overwhelming natural variability, the report said.

It suggested that climate change will intensify seasonal shifts and extreme weather in the years and decades ahead, making industries tied to seasonal patterns, such as winter apparel, increasingly vulnerable to unpredictable weather swings and weaker cold spells.