Eliminating middlemen, textile-man clothes north India

CHANDIGARH - He has a direct connect with his customers, without the usual chain of distributors, dealers and retailers. And that is the business model that has worked well for him.

Arun Grover has built a unique Rs.2.5 billion (Rs.250 crore) business and a brand for himself through his Amartex chain of stores — manufacturing and selling clothes and home accessories.

The Amartex brand reaches millions of middle class customers through “company owned, company operated” (COCO) stores spread across north India.

Initiating the concept of direct retailing in 1997, the company opened its first outlet at the factory premises in Panchkula, 10 km from here. It now has 50 outlets across Punjab, Haryana, Himachal Pradesh, Chandigarh and other adjoining states.

“We started with just one 2,000 square-feet store in 1997. Now we have over 250,000 square feet of stores across north India,” Grover told IANS here.

Amartex has planned to open 25 new stores this year. “By 2012, we are planning 100 stores in north Indian states alone. Only after that will we work for a pan-India presence,” said Grover.

Explaining his COCO model, Grover said: “Middlemen like distributors, dealers and others have no principles other than just making profits. Even if we were offering products at good prices, the middlemen were not selling enough.”

He said his company’s concept was to eliminate this chain and bring quality products to our customers directly. This, he added, has ensured that the products are reasonably priced and the chain does not jack up the price of any product.

“Our concept is that we should sell more and earn more. Not that we should earn more by selling less. We don’t give any franchisees also.”

Starting essentially with clothes, Amartex stores now offer home accessories - from door-mats, pillows, napkins to curtains - and grocery items under its ’shoppers world’ stores. Each store has a variety of over 5,000 products.

The product range is from Rs.50 to Italian-brand light-weight fabric suits priced at Rs.5,000.

“The cost factor is very important. Our USP is value for money. We have to provide the product, offer a good price and ensure timely availability to sustain ourselves even as department store chains and MNCs get into the scene,” said a confident Grover.

As a textile brand also, Amartex has grown from manufacturing just 4,000 metres of fabric every month to over three million metres now. A senior Haryana bureaucrat, at a function recently, stated that Grover is the “Dhirubhai Ambani of the north”.

Having started with just a manufacturing unit at Panchkula, Amartex now has seven manufacturing units spread across Haryana, Punjab and Himachal Pradesh. It has also outsourced manufacturing and other work to scores of other units and experts as well.

Amartex has its full-fledged design studio in Gurgaon, with Grover’s wife, Sangeeta, looking into the minutest details of designing. It engages artisans from Erode (Tamil Nadu) for bed-sheets, Andhra Pradesh’s coastal belt for Ikat fabric, Salem (Tamil Nadu) for cotton check fabric and Rajpura (Punjab) for ‘Phulkari’.

Amartex has launched high-end brands - ‘Groviano’ for men with Italian design and ‘Diana’ for women.

Having a nearly 2,000-workforce with it, Grover claims that fundamentals of the ‘Team Amartex’ are so strong that there is not even a single labour case against the company.

(Jaideep Sarin can be contacted at jaideep.s@ians.in)