Sometime in mid-2011, Sanjay Lalbhai got a call from his younger son, Kulin. An engineer from Stanford with two years experience at McKinsey under his belt, Kulin was studying MBA at Harvard Business School when he was struck by an idea for the family’s textile and brands business. A fan of e-commerce — he wrote two papers on the subject at Harvard — Kulin detailed an online business plan to his father over several long-distance phone calls. Lalbhai didn’t need much convincing. “I simply asked him to take charge of the idea once he returned. To my mind, this initiative was the need of the hour,” recalls Lalbhai as he sips coffee at Arvind Ltd’s sprawling plant at Naroda, about 15 km from central Ahmedabad.
It’s a sign of changing times at a company that made its name as a textile major over the past decades. And this isn’t the first time the ₹6,862-crore Arvind has reinvented itself — from its first licensed brand in 1993, the company focused exclusively on denim between 1997 and 2002, eventually becoming the world’s largest producer of the fabric and now having 30 brands, including global heavyweights such as Gap, Nautica, The Children’s Place, Hanes and Calvin Klein under its umbrella.
Now Lalbhai, the chairman and MD of the family-controlled company, harbours ambitions of crossing ₹18,000 crore by 2019. (see: Projecting growth) If that dream is to turn to reality, it is brands and the retail business that will need to rise to the occasion. The 60-year-old Lalbhai is counting on just that — he anticipates that five years from now, this business will be worth over ₹7,000 crore and account for a substantial 39% of turnover, from ₹1,915 crore today and a much smaller 28% contribution. Textiles, including denim, which brought in 68% of turnover in FY14, will drop to 44% by FY19.
Arvind is banking on the growth of its brands and an expansion on the retail front to power it to a formidable revenue figure in the next five years
Kulin’s e-commerce plan has just been launched through Arvind Internet, a newly created subsidiary. Its first foray is Creyate, where