1991 heralded a brand new dawn for retailers

1. 1991 HERALDED A BRAND NEW DAWN FOR RETAILERS:
FABINDIA’S WILLIAM BISSELL
Bissell says liberalization brought two other revolutions—the move from
unbranded to branded clothes and the advent of organized retail
For William Bissell, 1991 is when—as he put it metaphorically—the sun
started to shine on India.
It’s entirely coincidental that Bissell, now the promoter and managing director
of retailer Fabindia, joined the workforce in 1991.
He welcomed 1991 for it dropped the
curtain on an India of scarcity, where pretty much everything was “complicated” and
“messy”.
“When we started work, we saw the last year of the old system, where if you
went abroad, eight different forms needed to be filled. I had come back to India in
1988, and I remember how complicated everything was,” recalls Bissell.
“Opening a bank account was complicated, getting a phone connection was
just about impossible. I remember once someone gave mithai and threw a party when
they got their phone connection in Delhi after waiting for five years. We had this
incredible mentality of scarcity,” he says.

2. Things creaked along. When Bissell bought his first car, it was already in need
of repairs. “We took it out of the showroom and it broke down. It was a first-hand,
brand new car.” Cars those days weren’t shipped, but driven to the showroom. “So,
when you received the car, it had already done 1,800km. And it had a few accidents
on the way,” he says.
Bissell tried to set up a trust in 1988-89—it ended up under a pile of
paperwork.
And then it was 1991. In his budget speech, the then finance minister,
Manmohan Singh, set the stage for the cleanest break from the past that India had
seen on the economic front.
“For me, 1991 was like a brand new dawn, the sun came up. We suddenly
saw a huge amount of reduction in the bureaucracy. The sheer volume of paperwork
reduced and controls reduced. Otherwise, before that, you had to go to a government
office for every little thing. That culture changed in 1991. I remember it changed quite
quickly,” says Bissell, now 49.
For Bissell, the biggest change liberalization brought about was in the way
people thought about their future—“the sense that your future will be much better than
your present. This mental change was a real revolution of the liberalization”.
India allowed foreign direct investment in retail in 1997. Since then, retail has
emerged as one of the fastest-growing sectors in the country.
Fabindia was established in 1960 by William’s father John Bissell, an
American working for the Ford Foundation. It started out exporting home furnishings,
before stepping into domestic retail in 1976, when it opened its first retail store in
Greater Kailash, New Delhi.

3. Today, it has more than 170 stores across India and abroad.
“Liberalization brought two other revolutions—the first was the move from
unbranded to branded. The new aspirational India began to want and desire brands,”
says William Bissell.
“We decided in 1996 to go in for domestic retail and made a concerted effort to
move away from exports. It seemed to be a very stupid thing at that time because
everybody was in the exports business... that’s where you made the money.
“When we first decided to get into retail, we thought there would only be five
cities that we could go to—Delhi, Mumbai, Kolkata, Chennai and Bengaluru. You
didn’t think anything beyond that. As the economy grew between 7% and 9%, it
compounded even faster. First, cities like Pune and Hyderabad became markets, then
you added Gurgaon, Noida. Then suddenly cities like Chandigarh, Dehradun,
Amritsar and Jaipur became markets—and now the Jodhpurs and Udaipurs are
becoming markets for us. That was because liberalization put more disposable
income out there.”
In 2014, Fabindia Overseas Pvt. Ltd, which sells ethnic wear, furniture and
table and bed linen, announced that it will invest close to Rs.150-175 crore over the
next two-three years to open 200 franchise-run stores in smaller cities.
The second revolution was the idea of organized retail.
“Thanks to liberalization, you could get investments, you could raise equity
and finance, banks became more liberal about lending—that was another advantage,”
explains Bissell.
“So, people decided to move to organized retail and for that, first you got
air-conditioned markets, soon after AC markets, you got the malls. So, retail became
a comfortable experience.”

4. Fabindia products are mainly sourced from villages, helping to provide and
sustain rural employment. Artisans who supply these goods are Bissell’s partners.
Bissell has been instrumental in empowering rural artisans by bringing their
products into the mainstream market through the unique business model of Fabindia.
They way they work has changed too: Today, most craftsmen take their orders
on email; they are well rewarded; and happy to encourage future generations to take
the business forward.
“In the late ’90s and early part of this decade, a lot of them wanted their
children to become chartered accountants or engineers, but that’s changed now.
They are making good money now and they realize that it’s good to run your own
business. Now, they are encouraging their children who are educated to come back
and continue the business,” says Bissell.
“They are also investing in their units. More than 80% are encouraging their
children to continue this business.”
Fabindia, in which L Capital, the private equity arm of luxury goods maker
LVMH Moët Hennessy Louis Vuitton SA, and PremjiInvest own a stake, clocked
revenue of Rs.1,000 crore in 2013-14.