Weaving a success story

Updated: Apr 18 2014, 08:11am hrs
T Nagar in Chennai is one of the busiest shopping districts in the country. It is the largest in South East Asia, says PA Ravindhiran, who manages the Chennai Silks in T Nagar. T Nagar accounts for 70-80% of the gold sold in Chennai, the most important gold market in South India. The southern region contributes to 45% of the 800-tonne annual national offtake. It is not all just jewellery and textiles. You get literally everything from jumbo flat-panel TVs and other household appliances to handkerchiefs here. For instance, Ratna Stores has five floors of whatever you require to set up home. It started as Ratna Fan House where you could buy any brand and size of fan you want. Customers flock here from all over India. Besides Indians from all over, the other big-time shoppers are from Sri Lanka and South East Asia.

The area continues to be identified with apparel and jewellery. All the huge outlets have grown from one-room showrooms to multi-floor complexes. According to guesstimates, the turnover from this area is at least R20,000 crore a year. The official estimates, from two years ago, put it at a much lower R10,000 crore. Even if one goes by this figure, it is still double that of New Delhis Connaught Place, Mumbais Linking Road and Bangalores Brigade Road, which are supposed to be around R4,000-6,000 crore.

The owners of these giant showrooms in T Nagar keep a very low profile. They are notoriously publicity-shy and coy about their turnover figures. Almost all of them come from small towns, have modest beginnings, having learnt the trade, craft and business on their own and then striking it big. Take the case of Chennai Silks, one of the more prominent T Nagar behemoths. It has textiles, accessories and jewellery spread over seven floors. Footfalls here are staggeringthe daily average is nearly 2,000, climbing to as much as 20,000 in the festival season. So much so that the rather large parking is proving to be not enough. There is furious construction activity going on in the parking lot as Chennai Silks is now putting up a multi-level parking.

A Kulandaivel Mudaliar, from a small village near Tiruppur, was a weaver of dhotis. He set up a 100 sq ft showroom in Madurai in 1962 to sell khadi. His eight sons subsequently joined the business. It is interesting to note that the family had entered the garment business as workers. They gradually invested in a few machines and made minor exports of their products. Today, the family is one of the largest exporters from Tiruppur, employing 25,000 people. We are completely integrated now. We cultivate cotton, have spinning mills, knitting, printing and embroidery machines, says Ravindhiran, a member of the Mudaliar family.

The promoters have always thought in terms of scale. A large multi-brand showroom was set up in Tiruppur in 1978, followed by one in Erode and another in Coimbatore. They were then called Kovai Kumaran Silks. The shops started retailing jewellery as well. In Madurai and Namakkal, the shops sell only jewellery. Then, they moved to Chennai in 2000. The name of the showroom was changed to Chennai Silks as there was already a Kumaran Silks in town.

Today, Chennai Silks has a showroom in Kochi in the neighbouring state of Kerala as well. And there is a 2,000 sq ft boutique store in the Hyderabad airport. However, Chennai remains the largest market. The discount season is during the Tamil month of Aadi. Last year, we outsold everybody, says Ravindhiran. How they did that offers an interesting glimpse into consumer behaviour. We have interesting discount and gift schemes. We imported Samsung phones directly from Singapore as gifts for our buyers. We also get discounts from suppliers. Yes, the profit margins may some times come down. But it is made up by the volume increase in turnover. So, we dont really lose out.

The Chennai Silks group provides direct and indirect employment to about 40,000 people. The Chennai showroom itself employs 1,000 people. It provides hostel facilities for about 500 employees from outside Chennai. We provide food for all our employees. It is the same for everybody, including me, says Ravindhiran.

The group has more than 10,000 suppliers. Jewellery is sourced from Coimbatore, the centre for this business in the south. There are, at any given time, five lakh pieces of various kinds of textile products in the stores.

Every two months somebody is sent to China to source merchandise. We get fabrics, garment accessories, denims, womens tops from China, says Ravindhiran. A lot of the lower income family youngsters are moving into the labour market. These huge showrooms provide them with affordable and stylish clothing. We stock both designer clothes and affordable ones, says Ravindhiran.

Chennai Silks also has a fully-fledged IT team and its own ERP software. There are 60 people working in the IT department. Meanwhile, the group has also diversified into other businessesit has 83 windmills and is putting up a solar plant to produce 10 MW of power, having acquired 200 acres for this purpose. It also has a pre-cast construction division. We built up 1 lakh sq ft in 80 days, near Kangeyam, Ravindhiran says.

The Chennai Silks group has no debts, does not approach banks or institutions. It does not want funding from PE investors or angels. So what is the group turnover Around R3,000 crore, is Ravindhirans modest estimate.

Sushila Ravindranath