Raymond House, an imposing 30-storeyed giant, towers over posh south Mumbai’s Warden Road. It is the residence, head office and flagship store of 53-year old Gautam Hari Singhania, Raymond Group’s Chairman and MD. Raymond’s sprawling retail outlet goes up floor by floor – each floor up displays finer and costlier brands – till the customer hits the plush ‘Atelier Lounge’.
It’s the final stop for the very rich. To choose their marriage attire, they rummage through the Rs 10-lakh-a-metre suit material; then choose the hand-painted leather for their wallets and shoes. Those taking a break from the shopping are pampered by a bevy of hostesses serving a variety of wines and crackers and cheese.
Sitting amidst all this comfort and his cool brands in a casual T-shirt and a pair of khadi lounge pants, Gautam Singhania says his luxury collection may not make a big splash on his bottom line, but it certainly brings in big bucks. The rich shopper, if he likes the cloth and designs, typically picks up 10 pieces. “Those looking for great luxury products don’t have to look for a Canali or a Zegna anymore. We have 50 designers right here giving bespoke, made-to-measure outfits,” says Singhania.
When asked how much Raymond was investing in design and brand development, he retorts: “It’s no longer about money; it’s about the culture. The whole organisation is about product development. We display 50,000 articles in our trade shows; we have 20 franchised hubs in India translating designs to customised apparel.”
Ethnic wear is the new Raymond initiative over the last few months, where the company is promoting India’s design contributions in the form of Nehru jackets, and flowing kurta-churidhars. Khadi, always a hit in the West, is now the big oomph at home too!
But make no mistake. Raymond as a brand still makes most of its money from selling textile, as compared to readymade apparels. In the last financial year, nearly 48 per cent of the revenue, Rs 2,919 crore, came from branded textile sales compared to Rs 1,414 crore from branded apparel. “We sell 8 million branded shirts a year and 12 million shirting pieces; but then 70 per cent get tailored by our outlets,” says the Raymond chief.
Three years ago, when Gautam Singhania took over the company in 2015 after father Vijaypat Singhania ‘gifted’ his 37 per cent stake in the Raymond Group to his son, the company was floundering with bloated debt and lack of focus. Gautam initially sold off non-core businesses such as cement, steel and synthetics to get rid of the huge debt overhang; then acquired retail brand Color Plus to add to his other three brands – Park Avenue, Parx and the premium Raymond Ready To Wear. He also strengthened Raymond’s retail network to 1,100 exclusive stores and 20,000 retail outlets.
The results are telling. After two years of consecutive losses, in FY2017, the company turned in a profit of Rs 26 crore on sales of Rs 5,509 crore, while in FY2018, it did even better with a net profit of Rs 135 crore on revenue of Rs 6,109 crore.
But more than the turnaround, Singhania has been in the news for the divisions in the family. His father Vijaypat Singhania, cousin Akshaypat, four of Vijaypat’s grandchildren and others have cried foul and moved the Bombay High Court for a share in the redeveloped Raymond / JK House currently in possession of Gautam Singhania. These cases are yet to be decided.
“It is what it is. These are the legacy issues,” remarks Gautam. When pressed on the impact the dispute was having on his business, he retorts, “You lose your family to save the company.”
In all this hurly-burly, Gautam Singhania hasn’t forgotten his passion for motor racing and the F1 circuit. After winning the 2014 Ferrari Pirelli Open in England, he was recently elected as India’s rep on the Federation Internationale de l’Automobile’s (FIA) World Motor Sports Council.
In his new admin role, he is looking at the business prospects of bringing digital or ‘virtual’ racing to the FIA platform. There is an opportunity to monetise thousands of couch potatoes who ‘race’ sitting on their comfortable sofas; but Gautam Singhania is not giving it all away just yet.