Garment retailing is a sunrise industry in India. However, the industrial competitiveness has posed many challenges for the organized garment retailers in this sector. In this paper an attempt has been made to identify the challenges based on strong literature support in consultation of practitioners and consultants in this industry. This study has classified the retail challenges for organizing garment retailing into four factors 1) sourcing challenges; 2) locational challenges; 3) environmental challenges and 4) customer challenges. Also we have identified items for organizational performance as well as for competitive advantage. A confirmatory model has been used to test the hypotheses; (H1): Retailers understand the match between competitive advantage and organizational performance; (H2): They understand the match between retail challenges and organizational performance; and (H3): They understand the match between retail challenges and competitive advantage using structural equation modeling. This study shall help the organized garment retailer to know more about the business.