Mumbai: Sanjay Bindra likes to swim against the tide—much like his mentor Kishore Biyani.
He offered an unusual explanation for the growth of Biba Apparels Pvt. Ltd, a company that sells women’s wear, which he started in 2001: “I have got everything wrong and the product right, unlike other retailers, who got everything right, but the product wrong.”
Bindra said that the company has built itself on manufacturing and product strength. “We have not done any mass advertising. We have done everything from the opposite side of the expressway,” he said, suggesting that he did not follow the crowd, but went the other way.
The right fit: Sanjay Bindra of Biba Apparels.
“India’s women’s wear is primarily product and consistency. They neglect the product while everything else is right. In our case the management and officials are very mediocre. Our stores are mediocre looking, but we have a fantastic product.”
And now, as most retailers throttle back on expansion plans in the face of slowing consumer spending, Bindra’s Mumbai-based retailing firm is expanding its store network, gobbling up cheap outlets. While some of these spaces are going cheap, others have been vacated by foreign brands that signed properties at the height of the retailing frenzy and are now surrendering unviable outlets.
Even an inveterate risk-taker such as Biyani has sounded a word of caution. “Sanjay, zyada garmi mat dikhao (don’t show too much enthusiasm)” was the veteran retailer’s advice to Bindra.
When Mint contacted Biyani, he explained the different capacities in which he relates to Biba—as an investor, partner in business and as a buyer of Biba’s merchandise.
Bindra, however, sees it as just another day at the office. “We are not an exception (in the retail industry), there are other retailers such as Café Coffee Day who have done well too. We stand out because the apparel business in the country is witnessing a bloodbath,” he said in an interview.
A Macquarie Research Equities report in February had found that same-store sales growth for Indian retailers turned negative for the first time in the fourth quarter of calendar 2008, largely because of slowing economic growth, fear of job losses and a high base effect.
The problem was more pronounced in the high-end product segment, or lifestyle retail, rather than value retail, which is mostly about daily consumption products.
But Bindra is busy signing up properties at rentals that have almost halved in the past two months.
Now, he says, is the perfect time for expansion as real estate prices have softened to a great extent, and expects same-store sales growth by around 18-22% for fiscal 2009, and about 60% sales growth for the firm.
In fact, Bindra claims, he is asking for 12-year contracts for rental spaces to hedge against rent hikes once the economy recovers.
In fact, Biyani’s Future Capital Holdings along with Goldman Sachs in 2007 invested Rs12 crore in Biba Apparels —which is promoted by his mother Meena Bindra—a move that Bindra calls a stroke of luck since it found the right funding at the right time to help it scale up.
The relationship with Biyani, however, is one that goes back to 2001 to Kolkata, when Bindra was trying to swing a deal with a Pantaloon store for a window display. There was only one catch: the store manager wanted Rs50,000, a king’s ransom at the time. Distraught, he approached Biyani, who was supervising the opening of the store; Biyani overruled his manager when Bindra came up with a plan to offer free merchandise for Biyani’s first and only movie Na Tum Jaano Na Hum, which released in 2002.
“It was done in Biyani’s inimitable style, over a cup of tea and one samosa, across the table with no paperwork at the Pantaloon’s Kolkata store,” reminisces Bindra.
That Bollywood connection has flowed over into the retail business as well, and Biba launched its own movie line in 2002. “All multi-brand retailers had warned us, saying that the stores would look like theatres. The movies we tied up succeeded... Devdas, Hulchul, Baghban, (and) it rubbed off on our products,” Bindra recalls.
After making a mark in multi-brand retail outlets such as Lifestyle and Shoppers Stop —the label is available in about 100 retail outlets across 20 cities, including 69 stand-alone retail outlets, and plans to add 30 more by 2010.
“We started our first retail outfit at InOrbit mall at 2005, (I was) forced by Ravi and Neil Raheja after I gave a presentation in front of them.” Ravi Raheja and Neil Raheja are the promoters of the Shoppers Stop retail chain.
Bindra expects sales of Rs135 crore in fiscal 2009, more than twice the Rs65 crore in fiscal 2008, and a long way from the Rs1 crore the firm made in 2001, its first year of operations.