Home / Opinion / Views /  Fabindia IPO marks both the success and the failure of the artisan

Ethnic wear, organic food and ethnic furniture and furnishing retailer Fabindia going public marks a watershed moment in India’s fashion apparel business. The success–or failure–of the estimated 4,000 crore IPO-cum-offer-for-sale issue will probably set the tone for other players like Biba, W and Manyawar to follow suit.

But the 62-year-old Fabindia occupies a unique position in India’s burgeoning ethnic wear market, estimated at over 1,45,000 crore by brokerage firm Edelweiss. So far, India’s ready-to-wear apparel market has been dominated by organised sector players. Some are fairly long in the tooth–Raymond’s will complete a century in three years. Others, such as Pantaloons and Fashion Big Bazaar, are products of India’s post-reforms transformation. And yet others–like Reliance Brands and Aditya Birla Fashion and Retail–are part of giant conglomerates with deep pockets. But all of them have one thing in common–they predominantly cater to India’s urban middle class and are heavily dominated by western wear and designs.

Not so Fabindia. It managed to bring the craft of India’s fabled handloom textile weavers and artisans to India’s urban elite, who could flaunt their ethnic identity and social consciousness, with the added comfort of knowing that it would fit and drape well, and be of reliable quality.

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But its very success in taking ethnic wear back as a fashion product to the masses–today, Fabindia operates more than 300 Fabindia stores, as well as over 70 Organic India stores nationwide, besides its own e-commerce operation–may have robbed it of some of its sheen in Lutyens’ Delhi. But it undeniably placed Indian handlooms and ethnic wear on the urban consumer map. More than that, it took homespun fabric and the traditional kurta-pyjama–till then considered the garb of politicians and the poor–and made it not just mainstream, but chic.

Fabindia’s success in traversing this distance–from a bedroom in founder John Bissell’s Delhi home to a retail network spanning the subcontinent and overseas–is also the success of India’s unsung weavers, craftsmen and artisans. It is the success of the 50,000 artisans and over 10,000 farmers with which it works to source the goods that its sells.

Fabindia calls itself an ESG company that has not made any overt effort to tick ESG boxes, but has rather wired it into its business model. According to its draft IPO prospectus, co-promoters Bimla Bissell and Madhukar Khera intend to transfer 400,000 and 375,080 equity shares respectively from their personal holdings to the network of craftsmen and farmers who work with the company or its subsidiaries, “in order to reward and express gratitude".

But 50,000 weavers is a drop in the ocean. India is estimated to produce a staggering 95 per cent of the world’s handmade textiles and has a handloom and weaving tradition going back millennia. But successive governments, despite paying lip service to the concept of khadi and handlooms, have singularly failed to protect, leave alone better, the lives of those engaged in this field.

According to the Fourth All India Handloom Census 2019-20, there are about 3.5 million handloom workers today (including weavers and ancillary workers), down from 6.5 million in 1995-96. Of the 31,44,839 handloom households, a shaming 93 per cent-plus earned a monthly income of less than 10,000–which is below the minimum wage. The Handloom Board, which was supposed to advise the government on growing this sector, was wound up two years ago.

Fabindia’s success will become meaningful only if there is meaningful improvement in the lives of the craftsmen and women. Incidentally, more than 72 per cent of the workforce engaged in the traditional handlooms and textiles sector are women. The upside gains bagged by the investors–Fabindia counts Premji Invest, Bajaj Holdings and Investment, the Nandan Nilekani family and Kotak India Advantage Fund amongst its investors, while rivals have equally big investors such as Warburg Pincus in their fold–need to translate into a measurable gain for those who are actually underpinning this sector.

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