Few followers of Bollywood would have missed the large doses of Kimaya in Madhur Bhandarkar?s 2008 film, Fashion. In the six short years of its existence, Kimaya has established itself as the leading Indian destination of couture. And the spirit behind it, Pradeep Hirani has carved a new niche for couture retail in the country. As he is ready to realise his long cherished dream of taking Indian design to global fashion hubs, in this case, New York, where he opens his next store on Madison Avenue later this summer. Affable he may be, it was Hirani?s sharp business sense that has made him push the envelope to make fashion a business rather than an ?art gallery? in India. Today Kimaya is by far the leader in its category, the first choice destination for almost all of Bollywood?s fashinistas. In a freewheeling chat with Suman Tarafdar, he looks back at his journey and makes predictions, quite a few unlikely to please the ?fash frat?, into what the future holds for a sector known more for its glamour and business acumen. Hirani has mega plans for the future, including a Hafeez Contractor-designed building in Mumbai. If Fashion 2 gets made, will it provide more insights?
•Was there potential in fashion retail when you started Kimaya?
I started out with a garment exporter, but was bored. The materials and money came from different parts of the world, and I was just not happy doing that. That?s when I planned to open a multi designer outlet, a concept for which there was no recognition at the time in India, though globally they have been the longest surviving format. The designers I spoke to laughed at the concept. There were just a handful of designers then, who had been working already for at least 17 years. They had seen no growth, had just a store or two. Stores were run as art galleries ? whatever got sold was fine, the rest was returned. There were no fashion forecasting models. There was no thought process to planning collections. I saw a virgin market, potential and nobody willing to take up the opportunity. I could see Indians scaling up, and wanting to buy a label, not just garments.
•How did you go about it?
In 2003, I put together a team of fashion merchandisers and forecasters. Before I bought my first store, in Kemps Corner, Mumbai, I had already planned my second, which I did not want in India. I started with 26 designers, and now I stock 147 Indian and 16 Italian designers, making it easy for a customer to select what he or she likes. The second store was in Dubai, which was followed by a store in Delhi, which got sealed later. Now, after years of effort, I have got the court order to deseal the store at Olive, and that should reopen in about couple of weeks!
Now there are 14 stores, and my target is to reach 48 stores in India in three years. This figure is arrived at by researching the potential of the areas. Scalability is key, and growth has to be clientele specific. We are already in Mumbai, Delhi, Bangalore and Chennai. This year we are opening two more stores in Mumbai, besides a store each in Chandigarh, Ludhiana and New York. The latter, on Madison Avenue, is undergoing fitouts, and opens soon.
•You have different brands of stores. Why is that needed?
There is no such thing as an Indian consumer in fashion. Fashion is city specific. Delhi likes bling, drapes and layers. Bangalore avoids them. Saris are more popular in Chennai. The store in Dubai, Kimaya Jumeirah, is in a villa as Arabs do not like shopping in malls. The merchandise is focussed for the Arabs, and we do not even encourage non-Arabs in the store! There are days reserved for the royal family, where each wife tries to outdo the other in shopping, a fact that the retailer has to account for!
The average ticket size in Kimaya, which is for couture, is Rs 18,500. This is not a feasible range for many of the smaller towns that we plan to go to, which will instead have Viva Kimaya stores, where the average is Rs 5,200. We also launched Ayamik stores earlier. We have also wholly acquired the Pam Mehta brand.
•On an average, how much does each store cost? Are you franchising too?
This depends on the location. Obviously Delhi or Mumbai are more expensive. While I am buying the stores in Mumbai, I have rented the stores in Delhi. On average, the cost is about Rs 5-6 crore. The cost of merchandise, fitouts and rental and marketing are all about Rs 2 crore each. The only franchise till now is the store at Chennai, but now that I have got the economies of scale in place, I will be looking at this model.
•Are there any stores that are not doing as well as expected? How much is the impact of the slowdown?
The store at Ambience Mall in Gurgaon got zero response in the first six months, and that was when I went back to the owners and said I wanted to withdraw. We have renegotiated the rent. Business has gone down by about 20% but rental and people costs have gone down by 50% and 40% respectively. We have had a growth rate of 68% in the last five years, and expect to continue. Break-even time is three years per store.
•Are new categories of consumers emerging?
Now even the college girl wants designer wear. Earlier the market was for 30+, but now its fallen to 20. South India is into brands now. The stores are much larger now, 10,000 ft2 instead of 2,000 ft2.
•What are future trends looking like?
I do not see too many Indian designers surviving in the long run. They have still not evolved business models and are showing turnovers like Rs 2 crore, a shame. Also their strength is in Indian design, which is under threat of becoming a costume, to be worn at festive occasions. Indian kurtas look headed the way of the kimono, a celebratory costume. Indians are good at embellishments, and we should strengthen that.