• Women Entrepreneur

Rachna Aggarwal’s day starts at 6 am, when she has to get her daughters ready for school. In true super-mom style, she manages to pack them off by 7 am, post which she heads to the gym. From then on, it’s a race for time. Catch up on e-mails, check the previous night’s sales numbers and finally office by 8:45 am where she squeezes in an hour for herself before her cubicle is an open-door for her employees to walk in and out of as another day for business starts. “As of now I’m happy where I am. The day I wake up feeling that I don’t want to go to work, I’ll have to figure out where to head off to,” she laughs.

First stitches
Kolkata-bred, this Loreto House alumnus finished her B.Sc Economics from St. Xavier’s College in 1990, and took her pedigree up a notch when she sought B-School admission in IIM Ahmedabad, never to look back. She has been associated with the apparel and retail industry from the time there was no real industry in this sector.
Her career began in 1992, when she joined Coats Viyella Plc (now Madura Coats) as a management trainee in the garment division, moving on to become brand manager for Van Heusen.
A seven-year stint in the apparel major brought her a gamut of opportunities and experience vis-a-vis launching and building brands.
“I was involved with the launch of Allen Solly that introduced the concept of Friday dressing, chinos and light garments in India. It was the first store where clothes were not sold in boxes,” she recalls. By the time she reached her last year at Madura Coats, Aggarwal had gone on to handle marketing services, including loyalty programs and other processes.

Designing Indus League
While a lot of this planning was going on at Madura Garments Aggarwal, along with some others (Sriram Srinivasan, Fazle A. Naqvi, Arun Srideshmukh, Kanchan K. Pant, Uday Kumar and Vineet Nair), came together to start a clothing company of their own and interestingly Indus League became the first firm, out of the IT sector, to be set up with venture capital funding. The idea was to launch clothing with an international appeal and the opportunity was to fill the gap in the market with smart casuals.
“People had already moved from tailormade clothes in their minds to readymade clothes,” says Aggarwal. This period also coincided with motherhood in Aggarwal’s life, so when Indus League started she took on more back-end roles, involving less travel. This meant back-end and IT systems, networks, supply-chain logistics, production planning and purchase.

Birth of two brands
Indus League started with Indigo Nation and Scullers as their first set of brands, both for men only to begin with when it hit the market in August-September 1999. While the latter, inspired from the sport of sculling, was patterned as smart, trendy casuals, clothes for work or leisure (but not denims) focussing on chinos and washed clothes, the former was branded formal wear for men targeted for the under-30 age group. “Both these brands were conceptualized, designed, manufactured and branded in-house right up to store identity,” she says. Three years later, Scullers introduced women’s wear too, targeting people in the 30-40 age group. Consciously to an extent, Scullers, since inception, got an international flavor thanks to imagery and brand positioning around it.
“People assumed it’s an international brand though we never claimed to be one,” Aggarwal quips. Both brands were launched south of the Vindhyas, as Aggarwal puts it, in Maharashtra and South India for starters, with the intention of expanding to rest of India progressively. In early 2001, Indus League got its second round of funding, this time from ICICI Ventures, the first being from Draper International and Dalmia Cement together.

Big ticket investment
In January 2005, Indus League became part of Future Group, which came in as a strategic investor and took over stake of the previous two investors. This catapulted the company into another league altogether as it gave Indus League firm financial bandwidth to launch a host of new brands and expand aggressively.
“Our VCs were looking to exit, and the timing for an IPO wasn’t right so a strategic investor made sense as we would get distribution and critical mass,” highlights Aggarwal. Today, Future Group has a controlling stake in the firm.
Also, until then the apparel firm was functioning on a franchise model and on the back of the acquisition it changed its business model to company-owned and -operated stores. The reasons for this were manifold. First, this model across brands gave for better customer experience and lifted the bar in terms of store interiors as well. It also allowed the company to control all parameters which in turn gave it a competitive edge in the market. On the employee side, it helped retain staff better by having them on company rolls, thereby offering them a career as opposed to staying on the shop-floor forever. “We felt retail space is something we must invest in [long term lease], as our confirmed shelf space,” she explains. Every store needed average investment of at least Rs.1 crore to take care of interiors, stock, security deposits, and so Indus League retained only a couple of its franchised outlets.
Stores were about 800-1,000 sq feet in size, a format that remains till date and since malls were not a commons phenomenon then, they were all high-street fixtures. “We were very conscious about this route to expansion,” she affirms.
Once acquired, the firm was already selling in every Central Mall, growing fast too, as well as Pantaloons, another point of rapid sales. This, plus its own stores and Indus League had attained critical mass to cover all basic requirements in terms of mill minimum and back-end costs. Concurrently, co-founders began exiting, finding different things to do, and Aggarwal was the only one from the initial seven to stay on.

Wardrobe additions
Indus League was set to flush in a new set of brands to its portfolio and this phase saw quite a splash. In 2005 Urbana and Urban Yoga, two diametrically different lines of clothing were launched and in May-June of the same year it bought Mumbai-based Jealous 21 from an independent promoter, clocking in a small turnover of Rs.1.5 crore back then, which today generates a topline of Rs.50 crore. Its focus is niche westernwear for young college girls, 80 percent of the business coming from its collection of denims and T-shirts. Urban Yoga, on the other side of the spectrum, is centered around the ethos of yoga with a small range of accessories to include yoga mats and bandanas. The whole thought behind launching a range on these lines was an obvious opportunity since nobody had addressed this market till then. Plus, yoga as a practice was reviving and becoming big internationally. Today Urban Yoga, we are told, has the highest loyalty across all of Indus League’s brands.
By November 2007, the company became an official distributor for John Miller, classic and conventional formal wear for men, a Future Group brand, with a license to design and market it as well. Later in 2009, it got into an arrangement with lifestyle brand from Paris-Daniel Hechter, selling premium formal and casual wear, accessories, & home furnishings, which Indus League is slated to introduce early next year. “For now we started with men’s wear only as the market for high-end corporate wear for women is still small,” she explains.

Pin pricks
Needless to say, none of these brands were born sans challenges and for Aggarwal, apart from obstacles, they were paths to more profound learning. Remembering her Madura days as a management trainee, the first woman to be recruited by the firm in a managerial role, and not a common practice by others either, Aggarwal was given West Bengal as a region to handle while male counterparts were given metros. “Just to see if I could survive,” she laughs. “Sometimes I had to wait outside stores in the baking heat to take orders because shop owners wouldn’t let me in,” she recalls.
She remembers being the only woman in meetings for years on end. “I treated myself as just one of them, and so perhaps they too treated me the same way,” she notes. Aggarwal’s non-belief in women’s liberation, as a philosophy, supported her stance. For her, performing at the workplace was the only route to achieving success and a natural progression of the same.
“Earlier people were skeptical and uncomfortable, especially men, with a female boss,” she cites as a challenges on the work front. “Nor do I smoke, so I couldn’t hang out with people in corridors to get office gossip,” she exclaims. On the business side, coming from a multinational company adorned by old British culture, to an entrepreneurial setup brought in a gamut of issues never faced before.
“As management trainees, we were entitled to air-conditioned cars and five-star hotels. Suddenly as an entrepreneur you find yourself doing everything, worrying about which hotel to stay, factoring in costs,” she remembers. In the process she learnt new things from every mistake and strived to ensure the firm never committed the same mistake twice. Handling IT & logistics were interesting to her too, but since she didn’t possess the necessary background, Aggarwal had to learn everything from scratch.
She narrates a certain incident where they went horribly wrong with stock planning for the season. Such was the case that they had double the amount needed and no place to store extra merchandise. “We had to cover extra stock with tarpaulin because it was raining,” she says.
In another instance, she recalls going wrong in cutting ratios which resulted in thousands of size 44 shirts. “They just didn’t sell, don’t know if men’s sizes suddenly shrunk, but we had to re-cut all of them to smaller sizes and incurred a huge cost,” she says. “You can’t always research fashion, sometimes strange factors work in this industry, you need to take an intuitive call,” she points out.
Apart from this, there were lots of mistakes on the IT side, including internet bandwidth, a big deal those days when every additional kilo-byte counted. Though they had a common factory to manufacture apparel, portion of it was outsourced as job-work and the practice continues even till today. A factory meant labor issues.
“Earlier, if a notice came in my name I’d get paranoid, today everything comes straight in the CEO’s name and there is a lot of responsibility that signature brings,” she highlights. Constant feedback from customers and via store managers has been a ritual at Indus League.
The economic slowdown too brought in its own set of hurdles for Aggarwal and some decisions involved shutting stores, pulling back distribution from north India because malls in certain cities weren’t doing well, collecting payment became an issue, and more energy went in that than building the brand.
“We became a controlled retail organization and did away with outright selling; this helped us decide what to give customers,” she says.

Entrepreneur to employee
With Future Group’s acquisition Aggarwal was back to being an employee from an entrepreneur, as head of the supply chain. By the time they got in Jealous 21, she was back to front-end roles as well. “Allen Solly, in my mind, is still my brand. Future Group will be horrified if they hear it, since someone has been running it for 12 years now,” she quips. Controlling stake or not, Aggarwal’s role has been entrepreneurial since inception. In other words, flexible, allowing her to move across departments, bring in new processes, concepts, brands, extensions of portfolios, and keep evolving in the process with the ever necessary element of change to keep her going.
“My job has allowed me to accommodate my personal life, especially after I had children, given travel and timing constraints,” she says. Since she loves her job and delivers no matter what, it gives co-workers little room for complaints.
In the last five years, she has been spending time learning the financial side of the business. “Future Ventures is going to an IPO, and Indus League is its largest investment, so how we do reflects on how Future Venture does,” she points out.

Future Trends
Operating in an industry that’s growing at 13 percent CAGR according to estimates, expansion for Indus League involves both organic and inorganic growth. “The Indian apparel industry stands at par with international counterparts as far as seasonal styles go,” she notes. Though women’s wardrobes aren’t fully westernized, as compared to men’s wear, denims in particular have percolated across the society as universal attire.
Apart from new store openings, it’s heading back to the franchise model to penetrate tier II and tier III towns, a potentially huge market. “It’s not possible to visit these places frequently for site and store visitations,” she explains. Aware of the fact that small towns are not a women’s wear market yet, the company has begun by making inroads with men’s wear in cities like Jhansi, Kota, Jabbalpur in October 2011.
As far as other brands go, it plans to focus on accessories, knit and denim lines in Indigo Nation while simultaneously expanding Scullers’s product portfolio. “No more new brands now, we have enough on our plate,” she reaffirms.
Aggarwal is optimistic on the future of the apparel industry given that clothes aren’t a need, but impulse-based purchase.
“International wardrobes have high turnover, Indians are nowhere close, we’ve just started buying seasonally fashionable clothes,” she signs off.

Tags:
Future Group, Indus League Clothing, Rachna Aggarwal, Scullers