After a successful initial public offering that saw Vishal Retail Ltd’s shares soaring 75% on debut, chairman Ram Chandra Agarwal is getting even more ambitious. Starting a small apparel store after quitting his job as an assistant manager at a Kolkata metal firm, Agarwal now presides over a chain of more than 50 supermarkets and hypermarkets. In an interview with Mint, 42-year-old Agarwal says he always dreamed of making it big. Only now, he says, he has an even bigger dream: he wants to be one of the country’s top three retailers in the next five years. As a step towards that goal, Vishal Retail is planning chains of new retail formats including grocery and lifestyle stores to large wholesale or cash-and-carry hypermarkets. Edited excerpts
Let’s start with your childhood...
I was born in a lower middle class family and brought up in Calcutta. I studied in St Xavier College and during that time I joined a service.
In 1986, after leaving my service, I started a small store of 150 sq. ft ready-made garment store and you can say my retail career started from there.
So you took a job in between. What was the job like?
It was an assistant manager in a metal company and I was paid Rs300 (a month) and it lasted for one year.
Why did you quit?
Because I didn’t see any future in that job...in business I can do more. In that job, I could not fulfil my dreams, so I thought I should start my own business. At that time, people were very crazy about ready-made garments and I started 150 sq. ft store.
In 1986, the prospects for that business were not as great as they are today, but you still went into that business?
Not that great. You can say that was a passion to be a big man. That way, this is the only thing—by doing business, I can be big some day.
So you dreamed of becoming big?
Yes, from the very beginning I dreamed of becoming a big man.
What did you dream? How would you describe a big man?
Everybody knowing me and I becoming a famous man and having your own personality.
So what do you think now? Have you fulfilled your dreams?
Still there is a lot to come and, again, I am working hard to reach that goal.
What is your goal?
You can say that, at that time, I was a Communist person. I worked very hard to change the system of the country. At that time I was Communist-minded. I also dreamed of being a leader who can bring any change in the system of the country.
After doing all these things, I realized that to do such things I need to be a big man and without a name, anything you say—nobody hears you.
That’s why I came into business and I will make my money then the whole country will be knowing me, then I will try bringing any kind of changes in the system of the country.
So what are the changes you would like to bring?
Still the country is not knowing me. There are lot of things as a businessman I shouldn’t be talking about, for example, politics and all those things.
So what are the things in the system that frustrated you?
The systems are not there... you can say the political system, the educational system and the judicial system, or the police system or the civic system. For example, if you ask MCD (Municipal Corporation of Delhi) for an approval, they take 12-16 months for approvals. There is no plan for development.
For every one lakh population there should be one play ground...there should be wide roads. These are not being maintained...and can be maintained in this country also.
Do you plan to switch back to social work one day?
I think five years down the line if I get some name in the country I will be more suitable doing those work.
Does it mean joining politics?
Let us see. But still there is a fire in my heart that I should be doing something for my country.
Will it be a combination of a businessman and a politician?
You cannot do both at the same time. Can be running an NGO, then going full force into the politics of the country.
What social changes are you making at Vishal?
I am creating more and more jobs and, that way, I am doing a little bit for the country. I don’t believe in donations. If I do good to my colleagues and employees that’s okay.
Tell me about your business. You went into retail by default or you wanted to do that?
When I started the business, the ready-made garments business was increasing by the month as everybody was turning from fabric to ready-made garments and I thought it will be good for the future.
After three/four years I had a big sale of all the know brands such as Pepe and Wrangler, and I took the stocks in huge quantity and put up sales all over Calcutta and that went very good.
That’s where the journey started.
What happened next?
In 2001, I shifted to Delhi because the scope was more in Delhi.
In 2003, I started my first hypermarket. My dream was so big that I could not have fulfilled it just by selling ready-made garments.
Therefore, I converted my business into hypermarkets. The one I opened (on National Highway eight) was a big success.
You have come a long way from a small garment store to a chain of hypermarkets. How easy or difficult has the journey been?
I think if you want to grow, every time the journey is always rough.
You cannot fulfil your dreams without any fight. In the initial stage, there was fight to get capital...there was fight for business and competition, and getting the right people. And the fight is still going on.
What are the fights now? Bigger competition?
Yes, bigger competition and still people is a big challenge for any businessman because the business is growing at a very fast rate and it is difficult to get (the) right people for the right job.
There is high attrition level?
Yes, there is high attrition. At the store front level, the attrition is more.
What is the percentage?
It is somewhere around 35%.
And at the managerial level?
Its not as alarming at that level.
What are you doing to retain talent?
We are giving them training and we are even exploring an ESOP (employee stock options programme), good incentives and a challenging environment.
What is the biggest management lesson you learned on your journey from a small store to a chain of some 50 stores?
The passion for work should be there.
You would be having good knowledge and qualification but that doesn’t suffice. If one doesn’t have passion one cannot do his job well.
Therefore, passion is must in every person.
So that’s what you look for in your new hires?
When I interview people, I go for attitude and passion.
Passion and attitude toward work are the biggest things.
What are the challenges that you face in managing 50 stores and as they grow?
I think people are the biggest challenge in running a successful business. If you get the right type of people, you can get capital, you can get business and everything else if you have the right kind of people. That way, we are always focusing on hiring right type of people to get into the new dimensions of the business.
You recently had a successful initial public offering. What’s next?
Our first goal will be to expand at a very faster rate. We will be exploring more and more formats of retail and we will be exploring more and more categories of retail.
What other formats you are looking at?
Convenience stores, personal lifestyle stores and cash-and-carry formats. We are doing research on those formats and, maybe, in future we can go into all those formats.
Cash-and-carry is a good business and we can do business in all those products as we are sourcing them at a very minimum rate.
When can we see your new formats?
I cannot tell you the time-frame we are exploring.
When you say convenience store, is it something like Reliance Fresh that you are planning? Or the Subhiksha model?
You can say Subhiksha-type stores.
Are you going to use money from the IPO for those formats?
No, no. That money will be used for opening 22 more stores.
How are you going to fund the newer formats?
When you bring in the equity, then debt will always come and we will go for that as well...and there will be internal accruals. I can say we are very aggressive in our mind and we want to consume this particular (IPO) money in a very fast manner and, after consuming this money and showing our results to the investors, we can always go to the markets (again).
How many stores of the newer format are you planning?
Whatever we do, will be a chain. One or two stores is not viable. Whatever we go for, either its convenience stores or cash-and-carry or fashion and lifestyle, it will be a chain.
Are you talking to any foreign retailer for any kind of partnership?
Bringing in a foreign partner will not bring in any value-addition to retailing, if you are having experience and technology like SAP.
They (foreign partners) are not having any specific (knowledge) and they will charge you 2% (royalty) charge as Wal-Mart is charging Bharti. And, if you don’t bring any value, then why should we pay 2% or 3% to any foreign player.
How would you differentiate Vishal from any other retailer such as Subhiksha or Reliance Retail?
There cannot be a huge difference between the two biggest competitors in a free market economy. It’s only difference of doing a particular thing in a particular manner.
What is your game-plan as you are pitted against deep-pocketed companies, such as Reliance, Tata, Birla and Bharti?
We have the first-mover advantage. We know this value retailing in a very peculiar manner. We know the taste of different wants of consumers in different parts of the country. That way we are strong enough.
Where do you see Vishal Retail in the future?
I foresee we will be one of the top three retailers in India in the next three to five years.