Pantaloon's Identity Crisis

Stuck In The Middle: Fashion Brands Like Pantaloons And Max Are Facing An Identity Crisis

By Pritha Pahari 

What?

India's mid-segment fashion retail is under pressure from multiple directions at once. Brands like Pantaloons, Max, Lifestyle, and Shoppers Stop occupy a price and positioning band that is no longer as clearly defined as it once was. As Rahul Mehta, Chief Mentor of the Clothing Manufacturers Association of India, told The Core, "Increasing competition resulting in lower margins makes it a not too attractive business model."

From below, Zudio has raised the quality bar for value fashion significantly, offering trend-led clothing at sub-Rs 999 price points in well-designed stores, which means the traditional consumer who would have graduated from unbranded to a Pantaloons or a Max is increasingly stopping at Zudio instead.

From above, international brands like H&M and Zara have expanded well beyond their original metro strongholds, with H&M now operating 70 stores across India and selling items under Rs 1,000, putting them in direct price competition with mid-market incumbents.

Meanwhile, D2C brands like Snitch and Rare Rabbit, which scaled rapidly during the pandemic when physical retail shut and online shopping became the default, are capturing younger consumers who want something more distinctive than what a department store offers.

Online marketplaces like Myntra and Ajio have compounded the pressure by building their own private labels and actively promoting D2C brands to the same urban, aspirational shopper that mid-market physical stores once owned.

Why?

The financial results reflect this squeeze. ABFRL, which operates Pantaloons, posted a consolidated net loss of Rs 829.9 crore in FY26 even as revenues grew 11%. Shoppers Stop reported a Q4 net loss despite revenue growth of 8% for the full year. Trent, which operates both Zudio and the mid-market Westside format, posted an adjusted PAT of Rs 1,741 crore, profitable at both ends of its portfolio.

The difference is instructive. Westside, unlike Pantaloons, runs an almost entirely private-label model with a tighter merchandise mix, which gives it cleaner positioning and better margin control. The broader mid-segment has neither the price advantage of Zudio nor the cultural resonance of the D2C brands, and is increasingly dependent on discounting to drive footfall, which only worsens the margin problem.

The pressure has also travelled back through the supply chain, with orders from mid-segment retailers getting smaller as brands struggle with longer credit periods and thinner margins.

What Next?

What happens next depends largely on whether these brands can make sharper choices about who they are selling to and for what occasion. Private labels, faster inventory cycles, and sub-segment focus are the levers most analysts point to. Some are already moving in that direction. ABFRL launched OWND, a Gen Z-focused value format, in 2025. Pantaloons grew its e-commerce channel by over 30% in FY26.

These are steps, but the core question of identity remains open. A brand that tries to serve everyone in a market where consumers are increasingly specific about where they shop for what tends to serve no one particularly well.

25.31 lakh units

That's how many automobiles were sold across India in May 2026, a record high and a 9.55% jump over the same month last year, according to the Federation of Automobile Dealers Associations (FADA).

Overview: Passenger vehicles led the charge with 23.25% growth to 4.02 lakh units, while two-wheelers hit an all-time monthly high of 18.44 lakh units, up 7.54%. Three-wheelers grew 3.56% to 1.11 lakh units, and commercial vehicles rose 5.29% to 83,823 units. Two-wheeler EV share climbed sharply to 9.25% from 6.11% a year ago.

However, when compared to April 2026, the total vehicle retail sales marked a dip. “The sequential softness of 6.75% month-on-month reflects the customary post-April seasonal moderation and a delayed southwest monsoon, keeping May largely a pre-sowing month across much of rain-fed Bharat,” FADA President CS Vigneshwar said.

Future: FADA said the June outlook remains measured but cautiously optimistic, with monsoon progress and rural cash flows expected to sustain momentum, even as elevated fuel prices and heatwave conditions pose near-term headwinds.

India Braces for Spillover

With the US-Israeli war against Iran entering its 100th day on Monday, India is closely monitoring the escalating conflict, even as Oil Minister Hardeep Singh Puri assured that the country holds oil, gas, and coal reserves sufficient for 76-80 days.

Puri told CNN-News18 on Monday that prices are expected to ease in the coming months, with US and Canadian suppliers expected to cover shortages, though the situation could turn "worrying" if hostilities spread to other theatres.

Critical Moment: Global oil prices have surged roughly 40% to near $100 a barrel since war restricted shipments through the Strait of Hormuz, prompting Indian state retailers to raise petrol prices by 7.8% and diesel by 8.6% since mid-May.

The Indian Embassy in Tehran urged all nationals to exit Iran immediately, citing multi-city airstrikes, and Iran-backed Houthis banning Israeli shipping on the Red Sea. India's Ministry of External Affairs called for immediate de-escalate and pursue diplomacy.

Setup: Separately, Coal Minister G Kishan Reddy reportedly confirmed coal reserves adequate for 80 days of power generation, while BPCL announced a 3-4 week maintenance shutdown of its 200,000 bpd Mumbai refinery in September-October, Reuters reported.

India's New Investing Habit

India's capital markets are increasingly becoming a core avenue for household savings and wealth creation, SEBI Chairperson Tuhin Kanta Pandey said at the ICICI Securities India Investor Conference 2026 on Monday.

The country now has around 145 million investors in the securities market, with the base expanding at over 20% annually. Household financial savings as a share of GDP rose to 21.7% in FY25 from around 20 per cent in FY23.

How We Got Here: For decades, Indian households kept their savings in fixed deposits, gold and real estate. That began to change after the pandemic, when lockdowns pushed a new generation of investors onto digital platforms, household allocation to equities and mutual funds rose from 15% in 2020 to 25% in 2024, while bank deposit allocation fell from 53% to 42% over the same period.

Mutual fund assets have since surged from roughly Rs 12 trillion to over Rs 80 trillion. Equity issuances touched Rs 4.5 trillion in FY26, with 366 IPOs raising around Rs 1.9 trillion. Corporate bond issuances exceeded Rs 9 trillion.

The Turning Point: Market capitalisation has climbed from about 69% of GDP a decade ago to nearly 128% today. Pandey noted that capital markets are now not merely reflecting India's growth but actively enabling it.

The challenge ahead, he said, is ensuring the rapidly expanding investor base is met with equal rigour in transparency, investor protection and market integrity.

Margins Under Seize

From smaller packs on shelves to higher prices at checkout, Indian companies are scrambling to protect their margins as surging oil, freight and insurance costs and strained household budgets pile on pressure, according to a Reuters report.

The US-Israeli war on Iran has disrupted trade routes and lifted input costs globally, hitting import-reliant economies like India harder, where a weaker rupee is adding to inflation.

Context: Hindustan Unilever, Godrej Consumer Products and Dabur have rolled out low- to mid-single-digit price hikes, with Britannia preparing similar moves. Automakers Maruti, Mahindra, Tata Motors and Hyundai have also raised prices. Airlines IndiGo and Air India are trimming capacity and increasing fares. Where price hikes are not possible, companies are shrinking pack sizes.

Forecast: With limited room to pass on costs, companies are cutting advertising and non-essential spending. "The scope for further cost-cutting is gradually narrowing," said Axis Direct analyst Uttam Kumar Srimal, warning prolonged inflation could force sharper price hikes or margin hits.

LIC Who? Rajesh Responds

Rajesh Exports Chairman Rajesh Mehta defended the company after the Securities and Exchange Board of India (SEBI) accused the Bengaluru-based gold exporter of misrepresenting revenues totalling about Rs 15.15 lakh crore between FY21 and FY25 through transactions involving overseas entities.

Backdrop: SEBI's interim order barred Mehta and Rajesh Exports from accessing the securities market while it investigates the matter. The regulator also raised concerns about related-party transactions, fund flows and investments linked to the company's foreign subsidiaries.

The Turning Point: Responding to questions from PTI about major shareholder Life Insurance Corporation of India (LIC), Mehta rejected suggestions of any special relationship with the insurer. "We don't even know where LIC's office is," he said. Rajesh Exports has denied wrongdoing, argued that SEBI misunderstood its business operations and financial reporting, and said it would challenge the regulator's findings through legal channels.

Asian Markets Dive, Indian Markets on Edge Again

On Episode 896 of The Core Report, financial journalist Govindraj Ethiraj talks to C S Vigneshwar, President at FADA.

• Asian Markets Dive, Indian Markets On Edge Again

• A Slew of Measures to Attract Foreign Portfolio Investments and NRI Savings is Not Working Yet.

• Why Indian Car Sales Hit a Record High in May

• Airline Profits will Halve This Year Despite Revenue and Seat Loads Rising

• Will a No Car Friday in BKC in Mumbai Work?