For three years, Kunal Rohit Sachdev, 50, persistently wooed Dilip Chenoy, managing director and CEO at the National Skill Development Corporation (NSDC), to raise funds for his venture, Caravan Craft Retail. When he first approached Chenoy with the proposal in 2009, the initial response was a curt “we can’t do it”. Sachdev, however, refused to give up.
He finally convinced NSDC to fund his project with a total commitment of Rs 42 crore spread over four tranches. Of this, the Bangalore-based company got its first sum of Rs 8 crore in 2013. The same year, it managed to get Unitus Seed Fund on board, raising Rs 2.5 crore from the fund backed by billionaire venture capitalist Vinod Khosla.
Public sector outfit NSDC usually funds skilling and training-based projects. Caravan Craft works with the artisan community to create merchandise across apparel, jewellery, accessories and home décor, weaving in India’s traditional handicrafts with global fashion trends. By deciding to pump in money in Caravan Craft, NSDC was, for the first time, backing a model that is not purely a skilling initiative.
Why did it take such a unprecedented step? Because the retail venture looked scalable and sustainable to NSDC, a not-for-profit company started by the finance ministry under a public private partnership model. “The Caravan story was exciting in terms of linking skill development to markets and looking at involving artisans across the value chain. It seeks to increase the number of artisans across trades by providing them design inputs, linkages to market and a share of the profits,” says Chenoy.
Sachdev picked up the nuances of running a successful business during the 25 years he spent in the retail industry, including stints with top brands like ITC and leather goods manufacturer Hidesign. The idea of Caravan Craft germinated during his last assignment with Pondicherry-based Hidesign.
“While travelling overseas, I saw that large department stores responded to the merchandise that Hidesign put out. The reaction had more to do with the characteristic that Hidesign represented, the culture that the brand had and the handcrafted techniques it used to create the final product,” says Sachdev, who quit as CEO of Hidesign in September 2008 to start his venture.
Caravan Craft began with an initial capital of Rs 75 lakh and has two outlets in the country—in Bangalore and Pune. There are plans to open a store in Mumbai in some months.
The Bangalore store—Caravan’s first retail outlet which opened in November 2013—is close to breaking even. Overall, the company has clocked revenue of over Rs 90 lakh in the last seven months, including sales from its store in Pune, which started this March.
Caravan’s products are categorised under three large verticals—apparel, jewellery and home—with apparel constituting over 50 percent of the business. While some argue that Caravan’s products are similar to the kind of merchandise sold in stores like Fabindia, Bandhej and Anokhi, Sachdev says there is a clear differentiator and distinct customer connect. He points out that the cuts and silhouettes of Caravan’s dresses follow a simple Western pattern, while the detailing in design has a distinct Indian craft touch. The colour palettes of women’s apparel, however, are fashioned from the latest trends on international runways.
“Our emphasis on deep design intervention with artisans helps create merchandise which is aligned to global fashion trends and has a wider international appeal. Other brands have their own distinct philosophy and identity. I don’t think a comparison is fair,” Sachdev says.
Expansion is the buzzword for Sachdev now. Caravan Craft is in talks to set up its franchise outlets in tourist locations like Goa, Kochi, Jaipur, Mysore and Pondicherry. It is also exploring opportunities through ecommerce platforms and duty-free outlets at Bangalore airport through a tie-up with the Nuance Group, a travel retailer with presence in over 20 countries. An outlet will soon open at the Mumbai terminal too. “People were curious. They came to our stores, used our products, and spoke about us. Now we have a loyal customer base,” Sachdev says.
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(This story appears in the 08 August, 2014 issue of Forbes India. To visit our Archives, click here.)