Fabindia

Fabindia

Type	Private/Community owned
Industry	Textiles, Home furnishings, handloom apparel, jewellery
Successor	William Bissell (Managing Director, 1999)
Founded	1960
Founder	John Bissell
Headquarters	New Delhi, India
Revenue	$65 million (2008)[1]
Website	www.fabindia.com

Fabindia (or Fabindia Overseas Pvt. Ltd.) is an Indian chain store retailing garments, furnishings, fabrics and ethnic products handmade by craftspeople across rural India. Established in 1960 by John Bissell, an American working for the Ford Foundation, New Delhi, Fabindia started out exporting home furnishings, before stepping into domestic retail in 1976, when it opened its first retail store in Greater Kailash, New Delhi. Today it has over 170 stores across India and abroad, and is managed by his son, William Bissell.

In 2008, Fabindia had a revenue of $65 million, a 30% increase from the previous year. Fabindia sources its product from across India through 17 community-owned companies; a certain percentage of the shares of which are held by artisans and craftpersons.^[1]

The products of Fabindia are mainly sourced from villages helping to provide and sustain rural employment in India. They are currently produced by over 40,000 artisans and craftspeople across India. The hand-crafted products also encourage good craftsmanship.^[2]

History

1960: Foundation and early decades

Fabindia was first started as a one-man export company of home furnishings, by John Bissell in 1960, in the two small rooms adjoining his bedroom in his Golf Links flat, as "Fabindia Inc.", as it was incorporated in Canton, Connecticut. He used his recently deceased grandmother's $20,000 legacy as start-up capital.^[2] Originally from Hartford, where his grandfather was the president of the Hartford Fire & Life Insurance Company,^[3] Bissell, was previously working as a buyer for Macy's, New York left his position and came to India in 1958, as a consultant for the Ford Foundation to advise the Government of India run Central Cottage Industries Corporation. He was given a two-year grant to instruct Indian villagers in making goods for export. He firmly believed in the emerging Indian textile industry and was determined to showcase Indian handloom textiles with a way to provide employment to traditional artisans. In 1964, Bissel met British designer Terence Conran, whose newly established home furnishing retail company Habitat, soon became one of their biggest customers. Meanwhile, it also established a distribution network in the United States, supplying their products to mom-and-pop stores. Through early years Bissell travelled across craft-based villages and town meeting weavers and entrepreneurs, swatches who would produce flat weaves, pale colors and precise weights in handloom yardage, in the end he homed in on one supplier, A. S. Khera, a dhurrie and home furnishing manufacturer in Panipat, thus by 1965 it had a turnover of Rs. 20 lakhs, though for the first time it moved into a proper office.^[2][4]

FabIndia outlet, Khan Market, New Delhi.

The year 1976, saw major equity restructuring within the company, as adhering to Reserve Bank of India's rules instructing foreign companies to limit their foreign equity to 40 percent, Fabindia offered its shares to close family members, associates, and suppliers like Madhukar Khera, an early supplier to the company. This was also the height of the Indian Emergency period(1975-1976), and the rule which barred commercial establishments to run from residential properties was implemented, the company were forced out of its second premises, a house on the Mathura Road. This prompted it to open the first Fabindia retail store in Greater Kailash, N-Block market in New Delhi, in 1976, which remains its register office.^[2][3][5]

Now catering to the urban India as well, in the coming decade Fabindia differentiated itself from other government-owned and often subsidized players, in handloom fabrics and apparel sector, like KVIC and various state emporiums by adapting its fabrics and designs to urban taste. For this designers were accessed to modernize its line of home linens and most importantly introduced a range of ready-to-wear garments, including churidar-kurta suits for women, men's shirts etc. Even today, its team of designers provide most of the designs and colors, executed by village-based artisans. At the other end, these artisans learnt the basics of quality, consistency and finish, for instance avoiding frayed edges on handwoven shawls. The result was that traditional apparel and products became mainstream, and fashionable, fast adapted by a growing middle class and became identified as the brand for the elite and intellectual as well as affordable ethnic chic.^[2][6][7]

Fabindia lost its biggest customer UK-based Habitat in 1992, when the latter was bought by Ikano group, founder of Ikea, which then decided to appoint its own buying agent in India; the following year John Bissell suffered a stroke, and his son William, gradually stepped into the helm of affairs, taking over completely after the death of father in 1998, at age 66.^[3] Till then William, an undergrad from Wesleyan University, who had majored in philosophy, political science and government,^[8] had spent several years in Jodhpur, since completing his education in 1988. William, working with rural artisans and crafts co-operatives across Rajasthan, was instrumental in the setting up of various weavers' cooperatives. One of the first tasks taken up by William was shifting Fabindia's focus to the domestic market, en route to becoming a retail chain, for till then it only had two stores in Delhi. In time Fabindia’s retail business overtook its exports.^[6][9]

Interior FabIndia store, Delhi.

2000 onwards

Over the next two decades Fabindia, emerged as a successful retail business in India, with 111 retail outlets within the country and 6 abroad.^[9][10] Fabindia added its non-textile range in 2000, organic foods in 2004, followed by personal care products in 2006, finally it launched its range of Handcrafted jewellery in 2008.^[11] Fabindia sells a variety of products ranging from textiles, garments, stationery, furniture, home accessories, ceramics, organic foods, and bodycare products, besides exporting home furnishings.^[2][12] Fabindia's retail expansion plans started taking shape 2004 onwards, it opened multiple and larger stores in metros like Mumbai, Chennai and Delhi, while at the same time spreading out beyond metros. It opened stores in cities like Vadodara, Dehradun, Coimbatore and Bhubaneswar, Durgapur soon as revenues also grew from Rs 89 crore in 2004-05 to Rs 129 crore in 2005-06, reaching Rs 200 crore in 2007, in the year when it sourced its products from 22,000 artisans in 21 states.^[6]

Usually, the village-based artisan gets barely 5% of the tag price of their products as the rest is taken away by the middlemen. To counter this, Fabindia introduced an artisan-shareholder system through "supply-region companies" incorporated as subsidiaries. Here the craftspeople collectively own 26% of the equity in each company, based in nationwide centres, with Artisans Micro Finance, a Fabindia arm holding 49%, and employees and other private investors holding the balance.^[1] Also as part its expansion plans, 6% in Fabindia was sold in 2007, at an estimated $11 million, to Wolfensohn Capital Partners, a private equity firm founded by former World Bank president James Wolfensohn.^[9] In 2009, it acquired a 25% stake in UK based £30 million ethnic womenswear retailer, EAST.^[13] Today the company has retail outlets in all major cities of India—137 at last count—in addition to international stores in Dubai, UAE; 3 stores in Bahrain; Doha, State of Qatar; Rome, Italy and one in Guangzhou, China.^[13][14]

In 2005, Fabindia became a founder-member of All India Artisans and Craft Workers Welfare Association (AIACA), along with Pritam Singh (Anokhi), Ritu Kumar, Madhukar Khera and Laila Tyabji (Dastkar).^[15] On the occasion of its 50th anniversary in 2010, the company made all its 842 employees shareholders.^[16] By 2012, the company had around 1,000 employees and 16 community-owned companies, or supplier region companies (SRCs), which were formed in 2007, and employ 86,000 artisans.^[16]

In 2013, Fabindia purchased a 40% stake in the Lucknow-based organic food and supplements company, India Organic, co-founded by Hindu convert and daughter of billionaire Edgar Bronfman, Sr., Holly Bronfman Lev in 1997.^[17]

Controversy

On April 3, 2015, Union Minister of Human Resource Development, Smriti Irani allegedly spotted a camera positioned to record near a changing room, at an outlet of Fabindia in Candolim, Goa. She immediately raised an alarm, alerting her husband and then called a local legislator, Micheal Lobo, who lodged an FIR or First Information Report.

A local court later came down heavily on the Calangute police saying that they exercised their power of arrest arbitrarily against four staff members of Fabindia's Candolim outlet who were held late on April 3.

Judge Dvijple Patkar observed, "It appears that the police have lightly interfered/tampered with the personal liberty of the applicants for reasons best known to them. It appears that the applicants were automatically and unnecessarily arrested by the police. In my opinion, the circumstances of the case do not warrant any arrest. The police officer exercising the power of arrest as well as the investigating officer has not stated any valid justification for the arrest." ^[18]

On April 8, 2015 company’s Managing Director William Bissel, its former Chief Executive Officer Subrata Dutta, regional manager Ruchira Puri, marketing chief Ramu Chandra, stores in-charge Kundan Gupta, E-commerce head Arun Naikar and category head Ashima Agarwal have sought anticipatory bail to avoid arrest in district court in Mapusa town.^[19]

Philanthropy

William and John Bissell established "The Fabindia School" in 1992 in Bali, in Pali district of Rajasthan, today it is co-educational, senior secondary school with 600 students including 40% girls. The school subsidized tuition fees of the girl students and offers them scholarships, in partnership with "The John Bissell Scholars Fund", established in 2000.^[20]

Awards and recognition

Fabindia was awarded “Best Retail Brand” in 2004 by The Economic Times. In 2004, Fabindia was featured as part of a CNBC special TV report on India. Fabindia brand does not advertise, and largely works through word-of-mouth publicity,^[21] then in 2007 the craft-conscious enterprise concept of Fabindia became a Harvard Business School case study.^[22] 2010 marked 50 years of the foundation of Fabindia, and release of the book, The Fabric of Our Lives: The Story of Fabindia, by Radhika Singh.^[23]

Launch of Fables

In summer of 2014, with an idea to cater the modern Indian youth and also the international buyers who are fond of Indian textiles and clothing, Fabindia launched a western wear brand 'Fables'. The brand was first launched at Fabindia’s Connaught Place store in Delhi but later on, it was made available all over the country. Currently Fabindia sells through its own stores across the country, through multi-brand stores and also through its online store www.fabindia.com.^[24]

Fabindia signage and logo at its store at Delhi airport.

Notes

• "Fabindia- Fabric of India (Case Study)" (PDF). NMIMS. 2010. 

Bibliography

• Mira Kamdar (2007). Planet India: How the Fastest Growing Democracy Is Transforming America and the World. Scribner. pp. 185–188. ISBN 978-1-4165-3863-9. 
• Radhika Singh (2010). The Fabric of Our Lives: The Story of Fabindia. Penguin Books India. ISBN 978-0-670-08434-0. 
• Mukti Khaire; Prabakar Pk Kothandaraman (2010). Fabindia Overseas Pvt. Ltd. Harvard Business School Publishing. 
• William Nanda Bissell (2010). Making India Work. Penguin Books Limited. ISBN 978-81-8475-393-6. 

External links

• Fabindia - Official website
• Fabindia - Fabindia case
• Anjuli Bhargava, "The amazing success story of Fabindia", Rediff.com, June 18, 2008.