Retail is more psychology than business: Pradeep Hirani

Sunday, 15 June 2014 - 6:33am IST | Agency: dna

Pradeep Hirani, founder and CEO, Kimaya Fashions talks about the future of fashion retail and e-commerce

From being a garment exporter to becoming one of the countervailing high-end fashion retail names in the country – entrepreneur Pradeep Hirani's career trajectory is truly inspiring. His astute business acumen, a futuristic vision and guts to face the retail challenges day in and day out have kept him ahead in the luxe domain. Kimaya – the veritable bastion of chicness was the first fashion house to make a foray outside the country. The brand's second store was opened in Dubai and last year in Lahore, Pakistan. It started with 26 designers and today it has 173 designers across 25 stores all over the country. The fashion house's 26th store will be launched in Lucknow this month. The company has three divisions comprising 13 Kimayas, 12 Karmiks (offers designer wear at affordable prices) and an online ecommerce division.

"We take a lot of pain in ensuring that the customer gets more than what she's asked for. She should be always happy. We ensure that if she is paying for two, she gets two-and-a-half. That is crucial for us. We love challenges. Otherwise there's no fun," he shares.

Success story: A study in fashion retail
Pradeep started with making boring men's shirt for his buyers in Canada and the US. Back then he was confronting quota problem. The quota went through the roof and because of that, the whole garment business got majorly affected. Almost every garment exporter lost his shirt. "That's the time when I took a step back and thought - why should I lose for no fault of mine? I did my job well and I did absolutely everything which was required for the business. Because of a government policy change, my business suffered. I moved my garment factory to Dubai. This was about 18 years ago. Dubai had no quota issue and the US quota did not apply there."

Pradeep would go there every week on Saturday and Sunday six years in a row. The week used to end here while the week used to begin there. "Dubai was very organised and everything used to work like clockwork there. Once I established it, there were no challenges and I thought I'd vegetate."

The risk-taker sold his company in Dubai to a friend. "I looked at Indian market space and the design industry 12 years ago. I saw that Indian designers had multi-million dollars value issues but no balance sheets. They were still home-grown, small scale industry. I saw an opportunity there. I realised that the Indian woman had become a brand victim and didn't just want to wear only clothes or cover her body. She wanted to give herself an ego massage. Kimaya was born out of this need. It is one-place store for clients where she can come and compare between edited designer collections and compare, co-ordinate and combine and all of that. It gives her convenience."

Tapping e-commerce
"Our digital focus is NRIs completely so it has not really eaten into the business. Some years ago, retail was only about location, location, location. Now it is only conversion, conversion, conversion. The biggest destruction of this is going to be the real estate because it has overpriced itself due to its paucity. Today Bond Street and Oxford Street are perpendicular to each other but they are made of the same bricks and mortar. But the rentals are three-and-a-half times higher in Bond Street than Oxford Street. Why is that? All this will be removed by the e-commerce."

Fashion merchandising
"Our merchandising team has been told to think as if they are wearing their client's shoes. They buy for the future. Fashion is not about today, it's about tomorrow. What's fabulous today will be horrible tomorrow. What would they want to buy after three months? One man's food is another another man's poison. There's a huge disparity between the customers of South and North Mumbai. We have to customise so it's more psychology than business."

Consumer taste evolution
"We see more and more Indian women becoming bigger brand victims. They want to experiment with new designers but an established brand is always a safe bet. The international fashion forecast model has become extremely strong. It charts the way for Indian fashion. The international forecast coupled with Indian sensibility is what works. Still what may work in Bengaluru may not work in Ludhiana. It's more localised. We have one summer the entire year. In Delhi a client may not want to wear a teal blue at this time of the year but in Mumbai it doesn't matter."

Delhi-Mumbai divide
"Mumbai is New York, Delhi is LA. This is the beauty of this country and every 200 miles, the country changes and the thought process changes. This learning is crucial. That's why international brands have unable to make a huge foray. They have a cut paste model. They feel that what works abroad, will work here and across the country and that doesn't happen. Maybe it works in Mumbai and Delhi but India is no longer about these two cities. Some years ago, India had five to six cities today, it has 200 and growing. The acceleration in B-town is much higher than Mumbai and Delhi. Our balance sheet is strongly supported by tier one and tier two."

Fashion: The third religion
"Indian had two religions – cricket and Bollywood. However, that's no longer the case. The third religion called fashion is growing from strength to strength. Today kids don't just go to acting schools, they go to fashion schools. Today blogs, websites have more fashion than cricket and Bollywood. Fashion is the next sunrise industry. What technology was seven to eight years ago, fashion is today."

Key learnings
Pradeep's background in MBA has really helped him a lot in the business. "Besides creativity, you need to have a business sense. You may be drawn to it because of glamour but that doesn't go long. You need to think like a businessman. You need to have a business partner if you can't do it. One extremely crucial thing we believe in is scale. Scale is the only way you can bring down overheads, costs. In terms of scale, five top competitors combined can't beat us in terms of revenues, foot prints or number of designers. Growth is the most important. You keep growing every day."

Fashion after five years
Pradeep hopes that the new government has a fashion ministry like Italy and Japan who take fashion seriously. "We have a textile ministry but we don't have a fashion ministry. I think the time for it has come right now. We can be the huge exporters of fashion. We need to make 'Made in India' label much stronger. If you look at history of fashion, every 20 years the fashion capital has shifted. In 1800s, fashion started from Bond Street when Britannia ruled, after 20 years it moved to Paris where it became more refined and given a much higher pedestal and after Hitler, the fashion capital moved out of Europe to where money was calling it – New York. From Madison Avenue it shifted to the Rodeo Drive in LA. Currently fashion capital is trying to shift out of Milan. If it ever shifts out of Milan, there is a big possibility that for the first time fashion capital, India is a very likely choice and if we handle it well. Fashion capital chases growth and India is poised for growth. We have the biggest population of under 25 and it is this population who believes in the power of design."

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