On June 15, 2008, a fledgling Ahmedabad-based garments and fashion accessories company, Liverpool Retail India Ltd (LRIL) made a splash in the retail space by launching 151 outlets of a new brand ‘Barcelona’ across the country covering 15 states in one day..
Its chairman, 50-year-old Vijaysingh Rathore may well be another retail czar in the making to take on the likes of Future group chairman Kishore Biyani. That’s largely because, like Biyani, Rathore is a man who has unerringly got his finger on the pulse of the consumer.
Recounting his days as a struggling entrepreneur, Rathore recounts how the idea of launching affordable but value-for-money readymade garment stores for the fashion-conscious aam aadmi came to him while visiting a sale in a small town. “I saw how poor quality garments were selling like hot cakes largely because they were at discounted prices. For the rate-conscious lower and lower middle-class consumer, price is a major factor while buying a product. That’s what gave me the idea of trying my hand at selling good quality, readymade garments which would offer value for money at really affordable prices,” he confesses.
What he has also factored in while giving a final shape to his retail dream is the fact that the Indian consumer, apart from being extremely price-conscious, is also a sucker for discounts. “That’s the reason that ours are essentially discount stores which offer hefty discounts for eight to nine months in a year,” reveals Rathore.
An unassuming man from a humble background, Rathore did not learn the fundamentals of launching a business from any fancy B-school. A Masters in Economics from Agra College, Agra, his first job was that of a lowly-paid milk supervisor for Hindustan Lever Ltd in the moffusil town of Etah in Uttar Pradesh way back in 1988. “Even then though I dreamt big. I always wanted to make a name for myself,” reminisces Rathore.
And since Etah was too small and insignificant to accommodate his burgeoning ambitions, Rathore soon left for the country’s entrepreneurial paradise, Ahmedabad, in search of his dreams. But it is not as if he struck gold the minute he landed. The first decade in Ahmedabad too saw him flitting from one insignificant venture to another. “In Ahmedabad,” recalls Rathore, “My first job was again that of a salesman for a stationery marketing company following which I switched over to a small-yarn trading company where I had my first exposure at handling finances as well.”
The job did not last long but what Rathore took with him when he left the company was a friend and partner, Kailash Gupta, who shared his dreams of making it big and with whom he finally created LRIL.
However, Rathore’s first few faltering steps towards carving his own business were doomed for disaster. “Initially, Gupta and I did consultancy work advising small companies on financial activities. Then, in 1995 we started trading and export of medical products and opened offices in Russia and Nigeria.”
The venture folded up shortly leaving Rathore saddled with huge losses. “I learnt a lot from my failure. First, never to get into a business without sufficient knowledge and second, never to base a business model on hearsay, by supposed experts. My venture failed because I had no knowledge of the medical business and the products with which I was dealing—which is why I was misguided,” he confesses candidly.
In 2001, LRIL was incorporated and initially Rathore and Gupta started the garment business by supplying fabric and garments to multi-level marketing companies. Thereafter in 2004, they started working for other branded companies in the areas of networking, location identification and arranging franchises.
The exposure proved invaluable when in 2006, LRIL winged out as an independent retail venture. “By then we had figured out that there was a huge potential in the unorganised garment retail sector. In the country’s Rs 40,000 crore-apparel market, the organised market is just Rs 18,000 crore. Our aim was to tap the remaining Rs 22,000 crore in the unorganised sector,” reveals the LRIL chairman..
The LRIL model is so staggeringly simple that it’s a win-win formula for all concerned. “We saw that the small mom-and- pop apparel shops have limited stocks and a small range of products. That’s largely because they function on small margins and are dependent for supplies on wholesalers and mediators.” LRIL targeted these retailers making them an integral part of its franchise-business model. “We decided to rope in these small retailers as our franchises, outsourced our manufacturing to various locations across the country and evolved the Liverpool brand for the fashion and price conscious customers,” Rathore elaborates.
The franchise model also ensured that overheads required for setting up these outlets were kept down to bare a bare minimum as it did not involve space acquisition by the company itself. But how does he keep a check on the hrs quality of his products with manufacturing being outsourced. “Firstly, we provide the materials used ourselves. Second, we have a central warehouse where everything is scrupulously checked for quality,” Rathore discloses.
In just two years of its existence, LRIL today has a staff strength of 60 employees, 150 labour staff at its godowns and provides indirect employment to about 1,200 people across the country. The company, so far, has 142 Liverpool outlets in many cities and has just launched another 151 outlets under the Barcelona brand catering to the middle and lower-middle segment and also covering the semi-urban population. “That’s because the craze for branded products among the rural population is also huge and this brand will provide them with an easily available and affordable brand.”
On the drawing board are plans for boutique stores for the high-end market of discerning high net-worth customers as are plans of setting up an ultra modern manufacturing unit with a built up area of one lakh square feet at Ahmedabad and also taking the Liverpool brand abroad, all at an estimated cost of over Rs 500 crore. He also plans to foray into other segments of the fashion industry equipping his shops with googles, belts and other fashion accessories. Plans have also been drawn up to to enter the lingerie business. Like the man, his office in a bylane of Ahmedabad is remarkably Spartan. His mantra for success? “Meticulous future planning and anticipating public demand carefully as also studying the market closely,” he says. The company’s turnover has jumped from Rs 35 crore in 2006-07 to Rs 60 crore in 2007-08.