For more than 12 years, Anita Dongre had been supplying Indian wear she had designed to high street shops in Mumbai, like the ones along Linking Road, one of the city’s shopping hubs. But when she decided to label her creations, she was bluntly rejected. “Kaun khareedega yeh, madam? Isme embroidery nahin hai! [Who will buy this, madam? There is no embroidery on it!],” was what she was told.
In the 1990s, although heavily embroidered Indian wear did good business at boutiques, they were not what young urban women were really wearing. Dongre had travelled abroad extensively, and had seen changing trends. Her friends, too, encouraged her to design clothes that they would be able to wear themselves.
“[The boutiques] didn’t have the vision; I could see things changing around me,” says Dongre. She gives the example of a white linen shirt. “Every woman wanted that,” she says.
Hence, despite raking in money from selling the regular stuff, the rejection made her realise it was time to turn entrepreneur.
Not only did Dongre decide to persevere with her own line of clothes, she decided to retail them herself. Anita Dongre (AND) Designs was started in 1999, with a 300-sq-ft shop in Mumbai’s first mall, Crossroads. Thirteen years later, AND (the Western wear label), Global Desi (its ethnic counterpart), Anita Dongre iinter-pret and Anita Dongre Timeless now occupy 85 stores.
The four are slated to do a combined business of Rs 253 crore, with an EBITDA (earnings before interest, tax, depreciation and amortisation) of Rs 41 crore and a PAT (profit after tax) of Rs 30 crore in 2012-13. The growth in revenue is expected to be 128 percent from 2010-11, and growth in EBITDA of almost 183 percent. Dongre is headed to becoming the largest, most profitable and fastest growing Indian designer.
“The one key reason why designers in India haven’t been able to scale up is because they lack a CEO, or business head, who can manage their creativity and make it commercially viable,” says Arun Gupta, president, Future Ventures, which owns a 22.86 percent stake in AND Designs. There might be a lot of other designers who’re more creative than Dongre, but not everyone has the potent combination of creativity and the right commercial perspective.
The eldest of six siblings, Dongre hails from the hip Mumbai suburb of Bandra, minutes away from where one of her stores stands on Linking Road. She studied designing from SNDT, Juhu and Bcom from Narsee Monjee after which she worked as an in-house designer for export firms for two years.
Then she, and younger sister Meena Sehra, set up two sewing machines in the balcony of their house, and started supplying clothes to a boutique called Saks, which was frequented by Bollywood stars.
Dongre made a line of 12 linen dresses and showed it to Saks, who agreed to sell them. Over the weekend, nine of them were sold. On Monday, “I got a call saying they wanted more,” recalls Dongre. She was in business.
Coming from a traditional Sindhi family, Dongre initially faced resistance from her parents when she told them her plans. Her choice made them think she was being frivolous. But she didn’t budge.
Over the next 12 years, she became a successful supplier to almost all the famous boutiques in Mumbai. By this time, younger brother Mukesh Sawlani, who was working abroad as a banker, quit his job and joined his sister to manage the financial side of things. Sawlani is the CEO of AND, Dongre is the creative head, and Sehra manages production. In 1999, when they opened their first store, it was a decision they took collectively.
It is her family, again, that gave Dongre the ability to source her fabrics, one of AND’s main strengths. Her father was a manufacturer of children’s clothes, and guided her on who and where to source it from.
Finding the Sweet Spot
At the heart of AND’s success at scaling up is a model that takes a leaf out of famed retailer Zara’s book: Products positioned between designer wear that costs the moon, and mass market stuff that is cheap, but commonplace. This space is defined as the ‘bridge to luxury’.
Worldwide, at one end of the spectrum, there are marquee brands such as Louis Vuitton, Armani, Bulgari, Gucci and Burberry that are synonymous with luxury, and at the other end there are unbranded, cheap, mass-marketed clothes. In the middle is the bridge-to-luxury, which a customer crosses, before graduating to high-end luxury.
On this bridge stand global brands such as Tommy Hilfiger, Calvin Klein, Zara and Armani Exchange. These brands become relevant to upwardly mobile customers as they move up the value chain.
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(This story appears in the 09 November, 2012 issue of Forbes India. To visit our Archives, click here.)