A tête-à-tête with CMD Vijay Bansal
The ups and downs of Retail Chain
Cantabil Retail India Limited, a Delhi-based apparel and retail company, which posted a turnover of Rs. 289 cr in FY 18-19 was founded by Vijay Bansal who presently serves as the CMD of the company and started his entrepreneur journey with the launch of Cantabil in 2000. In a span of 19 years the brand has spread its wings with 285 exclusive retail outlets across the country. The company started its journey with flagship stores but soon expanded and became a chain of stores spread all over India.
In a tête-à-tête with Vijay Bansal, Team PERFECT SOURCING got interesting insights about a humble but highly focused and determined individual, who shared his journey, the ups and downs, the phase of restructuring and how he stood against all odds to shine again and get a new life like a phoenix.
He graduated from Kurukshetra University and has an overall experience of 30 years in garment and accessories business. In 1989, he promoted Kapish Products Private Limited and there after launched Cantabil brand in 2000. He has been instrumental in strategic planning and business development of the company including establishment of the Brand ‘Cantabil’. He was conferred with Delhi Udyog Ratan Award in 2008 by Government of Delhi.
“I started up from garment accessories business and then moved to garment manufacturing.” informed Bansal. Right from beginning only he was quite clear that the designs in store will be based on fashion in international markets. “The word ‘CANTABIL’ is inspired from an Italian word ‘cantabile’.
Today, CANTABIL brand offers the complete range of formal-wear, party-wear, casuals and ultracasual clothing for men, women and kids in the middle to high income group. While now the journey seems to be smooth there was a time when it was very tough to begin a fashion line and sustain as well. Fashion clothing was a new line for Bansal and it took him almost three years just to understand the business. “At one stage I even thought of giving up as nothing was happening according to my plans,” he recalls.
Finally, lady luck smiled on him and gradually things started taking a positive turn. Besides good quality, strategic location of all the stores gave much-needed visibility to the brand. “The location of store plays a very important role that is why the showroom has to be in the heart of the market” said Bansal
FASHION & QUALITY THE USP
“We used to do sampling from Italy and researched about latest fashion with the help of in-house designers and then created line accordingly,” averred Bansal. He mentioned that his daughter who passed out from NIFT in 2003 added a lot of value in designs which helped business in prospering. His son also joined business in 2006 and is working together to take company to newer heights.
“With a fully equipped and state of the art factory in Bahadurgarh, Haryana where more than 1000 workers are employed the company does not deny its interest in getting into garment exports also if the opportunity comes.“
While Cantabil was a private limited company, the concept of PE (private equity) doesn’t exist in Bansal’s lexicon as they (PEs) don’t give the freedom to do business. The company thus brought IPO in 2010, the investment from which helped the company in expanding capacities by setting up factory with latest machinery and valuable people and also supported in reaching out untouched markets of India.
THE UPS AND DOWNS OF THE JOURNEY
When the recession came in the year 2012-13 in garment and retail industry the company had to postpone its expansion plans. “It was a very challenging and testing period for us as we had to postpone 500 showrooms expansion plans for which the merchandise was already made. To survive in such a tricky scenario, the company decided to make only 20% new merchandise and use the existing stock only.
“We sold all merchandise at the cost price and tried to minimise losses,” he added. The strategy of offering up to 80% discount proved to be one of the reasons for the downfall as offering deep discounts and expanding by means of opening stores without focus on basic fundamentals of retail is not a sustainable strategy and this was the cause of their undoing. There were losses seen at both the operating and net profit level in those three years.
The company did change its approach in FY12 and decided to do away with the discounting strategy and close stores where they were not making money. “We had to close existing showrooms of our brand La fanso and 150 Cantabil stores as well. Only 150 stores were sustained,” said Bansal. This restructuring exercise cost the company three years to bounce back and recover losses. It was only in FY15 that the company saw growth in sales and was back on track.
“We are looking forward to 30 % YOY growth and hope to achieve target of Rs 1000 cr sales in the next five years.“
The challenging times taught the company important lessons of being very selective and cautious in expansion. While on one hand the group became cautious in sourcing on the other it started working on aspects like improving sales, enhanced visual merchandising, quality and workmanship of its products which turned out to be successful as the company was able to fetch good sales and profits as well.
RISING UP AGAIN LIKE A PHOENIX
FY 19 was a crucial year as the company continued to focus on the growth agenda. “We closed the fiscal year with an increase of 46.29% in total revenue from Rs.19,723.60 Lakhs in Financial Year 2017-18 to Rs. 28,855.08 Lakhs in Financial Year 2018-19.
The EBIDTA has also improved from Rs.2137.58 lakhs to Rs. 3360.35 lakhs thereby recording an improvement of 57.20 %,” informed Bansal. Kid’s wear has come up with an additional advantage for the company keeping in mind the non- existence of much established brands in kids wears market.
“The company is using all imported technology for making suits, trousers and shirts and has specialized machines for products like wrinkle free trousers and shirts“
“Last year we saw tremendous sales and this year also we are eyeing a growth of 30% in our retail sales” said a proud Bansal. At present the company has 285 showrooms and having a target of opening 70-80 stores every year. Apart from Metro cities, the company is mainly targeting to open stores in tier 2 and tier 3 cities. The strategy of expanding in tier 2 and tier 3 cities proved to be successful for the company.
MONTHLY PRODUCTION CAPACITY OF FACTORY
- 1 lakh pieces per month in house
- Specialised suit plant with all imported machines
- Dedicated unit for denim and casual units
- Product Range: Men’s (formal and casual wear) Ladies (formal and casual wear, work wear and kids wear.
PRODUCTION IS STRENGTH
The company is using all imported technology for making suits, trousers and shirts and has specialized machines for products like wrinkle free trousers and shirts. For designing trend inputs from international forecasting companies like WGSN is being taken and then the range is created accordingly.
On being asked what has been the success mantra of the company Bansal replied, “Offering latest fashion with high quality whether it is in terms of finishing, look, fabric or even accessories helps in forming a loyal customer base and then offering it at a good price is our brands success mantra.”
“Strategic location of all the stores gave much-needed visibility to the brand“
With factory in Haryana Bahadurgarh area where more than 1000 workers are employed, the company does not deny its interest in getting into garment exports also if the opportunity comes. “I still feel within India there is a lot of scope and many markets that have potential are not reached,” he added.
Today Cantabil is known as a complete family store gaining popularity all across India especially Tier 2 and Tier 3 towns. In just eight months the company has already opened 50 stores and eyes to open 70-80 stores per year.
Bansal feels that the slowdown in market affected the business but now sales are growing again. “We are looking forward to 30 % YOY growth and hope to achieve target of Rs 1000 cr sales in the next five years.
“Last year the company achieved Rs 289 cr sales and this year it is eyeing retail sales growth of 30%. At present the company has 285 showrooms and targeting 70-80 new showrooms every year mainly in tier 2 and tier 3 cities apart from metro cities.“
“We are in value segment but we are giving good quality, innovation along with good pricing which will help us in gaining in the long-run,” concluded Bansal.