Childhood buddies from four years of age, Shankar and Augustus Caesar will finally go their separate ways a few months from now, after fifteen straight years of playing and studying together. Caesar, who is all set to graduate in computer science from the Ramakrishna Mission Polytechnic College in Chennai, will soon start his first job with a pay of Rs 17,000 per month, whereas Shankar, who has studied mechanical engineering from the same college, has landed a job in Rajasthan that will fetch him Rs 15,000 each month. While the teenagers are excited about life on their own in the outside world, their graduation is a bittersweet moment for 60-year-old Poonam Lalwani, who has seen the duo grow up in front of her very eyes. To celebrate the transformation of the youths into responsible adults, Lalwani plans to take them to Mumbai on a well-deserved break. This might have sounded like the life of the average Indian teenager, except for a key difference — Shankar and Caesar are among the 24 orphans Lalwani’s Mumbai-based Life Trust is taking care of.
“We spend close to a lakh each year on each of the kids and are happy to see our efforts finally paying off. We have tried very hard to nurture them through education and to inculcate good values and ideals in them,” says Lalwani, whom the 18 girls and six boys at the centre affectionately call Amma. Today, the trust — which Lalwani has been a part of since 2004 — not only runs orphanages across Mumbai and south India but also works closely with municipal schools, institutes for the specially challenged, remand homes and integrated child development programmes. Since inception, the 85 employee-strong trust has impacted the lives of nearly 50,000 children from Mumbai, Chennai and Bengaluru each year. While Lalwani continues to be the face of the trust, the man responsible for the organisation’s existence is 62-year-old Mukesh (Micky) Jagtiani, who today runs a $5-billion retail business spanning 18 countries across west Asia, central Asia and Africa.
Jagtiani had floated the trust as far back as 2000, which is when he met Lalwani, a cousin of his wife Renuka, and came to know of her philanthropic pursuits. Jagtiani decided to dovetail the two initiatives together to create the trust, to which he contributes over $2 million annually. Thanks to Jagtiani’s generosity and a diverse resource pool, Lalwani has managed to ensure that today the trust is self-sustainable. Though it has been a couple of years since Jagtiani’s last India visit, he monitors the local development scene very closely. “He visited Dharavi, Asia’s biggest slum, on his last trip and loved the place. He thought that the people there were very industrious, despite the overarching poverty around them,” explains Lalwani, who considers Jagtiani a close friend and mentor. She adds that Jagtiani, who likes to keep things simple, spent his 50th birthday at the trust’s Chennai orphanage, mingling with the children there. Perhaps the reason Jagtiani has a soft corner for this extended orphan family of his is because he knows what it means to lose one’s entire family.
In the 1950s, at the onset of the oil boom in the Gulf, Jagtiani’s parents decided to leave Indian shores and migrate to Kuwait in search of better prospects. Born in Kuwait in 1952, Jagtiani didn’t exactly have an easy life. When he was just three, his parents sent him and his elder brother (Mahesh) to India to stay with their aunt (father’s sister) and complete their schooling. After spending some years in India, Jagtiani was next sent to a boarding school in Beirut at the age of 12 and then to London in 1969 to pursue accountancy. But Jagtiani never really got around to liking the subject and after several failed attempts dropped out of the course. After giving up on academics, he decided to sustain himself in the city — then in the midst of a recession — by cleaning hotel rooms and driving a minicab without a valid licence to make ends meet.
Though his father’s trading business was grounded after disputes with partners, Jagtiani’s brother Mahesh had managed to take a store on lease in Bahrain, with plans to turn it into a franchisee outlet for British baby products retailer Mothercare. But tragedy struck the family soon after, as Mahesh was diagnosed with leukemia and they had to shift base to Bahrain to take care of him. Within months, he passed away. Nine months later, Jagtiani’s father died of a heart attack and, a year later, he lost his mother to terminal cancer. By age 26, Jagtiani was left orphaned. Remembering his father’s worries about how his son (Micky) would make ends meet, he contemplated quitting the Gulf for good and moving back to India. That’s when he decided to make one last gamble — investing $3,000 worth of family savings to begin what his brother had left unfinished.
Though he lacked the business acumen required to run a retail set-up, Jagtiani decided to take over the 5,000-sq ft store and named it Babyshop, stocking it with infant clothing and products. Since he couldn’t afford to hire more than one employee, Jagtiani became a hands-on owner, getting involved with every aspect of the business — picking up consignments from a nearby port, stacking inventory, managing display and even mopping floors. After opening his second outlet in 1980, Jagtiani tied the knot with Mumbai girl Renuka, who has since been both his life anchor and business partner. The big inflection point came at the beginning of the Gulf War in 1992, when Jagtiani, who was by then running six stores with over 400 employees, decided to shift base to Dubai. It was also around this time that the then ruler of Dubai, Sheikh Maktoum bin Rashid Al Maktoum, was transforming the emirate into a tax-free shopping and tourist destination. Having built his business around serving immigrants to Kuwait, Jagtiani decided to continue the same strategy in this market, focusing on UAE’s burgeoning migrant Indian population, which went from 4 lakh in 1992 to 10 lakh a decade later. Fortune did favour the brave, Jagtiani, who is today one of west Asia’s biggest retailers. What began as a chain of Babyshops turned into a diversified modern retail conglomerate covering diverse businesses.
Keeping that value proposition in mind, Landmark has created its own product development line, handling its own fabrics, sizes and design work. “So, we have a 40% edge over our competition in terms of pricing because everything we do is in-house,” Jagtiani was quoted as saying in the aforementioned interview. A Deloitte report on Gulf retailers — which names Landmark one of the fastest growing chains in the regions — acknowledges that the homegrown brands concept is highly profitable for retailers, as it helps them cut off intermediaries in the value chain and raise profit margins. Though west Asia accounts for 80% of the group’s turnover, which is growing at a CAGR of 23%, Jagtiani — a big admirer of Sam Walton of Wal-Mart — has also built his business interests in India quite rapidly over the past 16 years.
Though Jagtiani is no longer involved in the day-to-day operations of the group he has left the business in the hands of an able team of professionals, including Ramanathan Hariharan, the head of strategy and development of the group’s India operations who also oversees the group’s investments in the country. In India, Landmark has gone through a distinct learning curve and this is evident when you consider the fact that it chose to enter the country in 1999 with a departmental chain format instead of a single-brand outlet. “In west Asia, we have always specialised in large-format stores and focused on a format called category-killers. In India, we had to strike a balance because the market was evolving. We went with the department store format in the country because we believed that we needed to bring all the different categories together,” explains Hariharan when we meet him at his rather functional office in the Jebel Ali Free Zone. Today, over 250 national and international brands from the apparel, footwear, children’s wear and toys, household and furniture and health and beauty categories are housed under Lifestyle’s roof.
That Jagtiani backs great concepts is evident in the fact that Hariharan, who introduced Max as a value fashion brand in west Asia in 2004, got the go-ahead to introduce the brand in India within two years of its Gulf launch. “When we launched Max [in India] in 2006, we knew the concept was going to be successful because it offered good-quality products at affordable rates and catered to the mid-market segment,” says Hariharan, who roped in Vasanth Kumar from Madura Garments in 2005 to head the brand. Today, from its first outlet in Indore to over 120 outlets across the country, Max has emerged as a strong contender in the mid-market fashion segment. Unlike Lifestyle, Max is a private label-driven business, which means that its margin for error is minimal. Kumar remembers his meeting with Jagtiani, who told him that value fashion was a high-mortality business. “Internationally, only 10% of brands survive, while 90% die. Max has to be in the 10%,” Jagtiani told Kumar, assuring him of his support nonetheless. The initial years were indeed challenging, as being a private label brand meant that unsold inventory had to be gulped down and fresh collections had to be churned out.
Playing It Safe
Though the Max business has gained ground, Hariharan sees as much scope for all of Landmark’s brands. “There is no such thing as a big bet for us in India. We see potential for each of our formats. If Lifestyle has to penetrate into smaller markets, it has to find ways and means to do so,” he says. In the case of Home Centre, which deals in furniture, fixtures and furnishings and made its India debut in 2008, the parent is willing to be patient. “We have tried to maintain a balance between aspirations and value. We are expanding into smaller cities such as Coimbatore and Bengaluru.” Currently, there are 18 Home Centres spread across 11 cities in the country. “These businesses take time to grow. You must have a clear vision of what you want to do,” adds Hariharan.
Just like its hypermarket business, Landmark struggled with its F&B foray in India, too. It entered the café market in 2008 under the Citymax Hospitality division, which owned the franchisee rights of Australia’s Gloria Jeans Coffee in India. But the group could not manage to grow the business beyond 27 outlets and it finally exited the franchise arrangement last year, rebranding the existing outlets as Krispy Kreme Doughnuts stores. Landmark had, in 2012, entered into a franchise agreement with the latter, with plans to open 80 stores across south and west India over the next five years. Currently, it boasts of 15 outlets spread across Mumbai, Bengaluru and Chennai. “Our target is 50 stores over the next three years,” says Lumba. The other two businesses that Citymax runs in India are Polynation, a mid-scale restaurant in Bengaluru and Fun City, an arcade game zone in 16 malls across India. “The plan is to keep adding four to five units of one city every year,” explains Lumba.
So far, Jagtiani has invested over Rs 600 crore in the group’s India operations and will continue to invest around Rs 200 crore in it each year over the next three years. Though the management is mum on the profitability and the kind of return that the business is generating, Hariharan says, “India has potential and promises volumes but profitability will always be lower here when compared with west Asia.” On his part, Jagtiani does not appear to be a man in hurry. “Micky and Renuka understand the nuances of the Indian market and are in it for the long haul,” says Lumba. A big believer in Buddhism, Jagtiani believes one can emerge successful only after going through a lot of hardships and sorrow. “So when you get it [hardships], welcome it, because it is going to teach you more about life than anything else,” he says. Coming from someone who lost it all and got it back again, twice over, that’s some sage advice.
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