Founder, Hasbro Clothing Pvt. Ltd.
Education: Graduation in Commerce, D G Vaishnav College, ChennaiAge at starting business: 19 years
No. of years as entrepreneur: 21 years
Initial investment: Rs 25,000
Sources of fund: Personal Savings
Company: Hasbro Clothing
Turnover: Rs 70 crore (2007-8)
No of employees: 600
One step at a time: that was the lesson Hanif Sattar learnt from his father’s mistakes. And that learning has put Sattar at the head of a Rs 70-crore entity today. “My father’s fabric wholesale business was doomed because he was engaged in too many things. He ran out of funds. So I made sure to take up just one thing at a time,” says 40-year-old Sattar. It was because of his father’s failed venture that Sattar had to take up a job soon after finishing school to contribute to the family’s finances. In 1984, at age 16, he started off assisting the promoter of Chennai-based Samco, a textile showroom, earning Rs 3,000 a month. “The owners were my relatives. They were exporters who wanted to set up a retail outlet.
They took me in as a manager to help them set up shop. I was willing to give it a shot. I did the buying and helped them to create workable systems in the store,” he says. He was soon put in charge of daily accounts. “It was quite beneficial since I got to learn management skills on the job,” says Sattar.
MAKING A BEGINNING:
By the time Sattar turned 19, he was ready to strike out on his own. In 1987, he quit Samco and with Rs 25,000 of his personal savings set up Flair Creations, a tailoring unit. “During my three-year stint with Samco, I learnt various aspects of garment and retailing business,” he says. His family backed him fully. “Though my family had to suffer a lot as a result of my father’s failure in business, nobody stopped me from taking the plunge. They had faith in my abilities,” he says.
Sattar started off with an advantage since he already had a good rapport with Samco, one of his first customer-cum-distributor. He supplied Samco and other retail stores with trousers, which were sold under their labels. Sattar got Rs 90 for each piece. Around this time, his brother Suhail joined him.
“He was still in school but he used to visit the tailoring unit every evening to oversee the tailors. It allowed me to concentrate on other things,” says Sattar. The first year saw him achieving a turnover of Rs 2 lakh. Apart from stitching trousers for big retail outlets, Sattar also catered to individual customers. Within five years he had 3,000 regular customers. By 1992, he had moved into a bigger place with 20 machines.
Although Sattar didn’t face any problems in arranging the initial investment amount, meeting working capital requirements proved a challenge. Orders were completed on time, but payments were hardly as prompt. “Those were difficult times. We used to pay our tailors on a weekly basis but due to delay from clients, we couldn’t pay them on time. As we were a small enterprise, the tailors simply walked out. It affected our work badly,” says Sattar.
In 1989, his maternal uncle bailed him out by buying a stake in the business for Rs 2.25 lakh. Sattar accepted his uncle’s offer but didn’t notice the exit option in the agreement. That was to lead to some trouble later on. In 1992, Sattar pumped out Rs 5 lakh from his tailoring unit and used it to open his first retail outlet at Prince Plaza, a shopping complex in Chennai, under the brand name of Genesis. “Our garments were already sold by the retailers. So moving to retail was a natural extension for us,” he says.
Competing with established players like Arvind and Madura was not easy. However, Sattar didn’t give up. He offered competitive rates to customers to beat his rivals. “There was a major difference between our prices and those of other brands available in the market,” he says. In the first years of its operation, the outlet reported a turnover of Rs 20 lakh. “That was a turning point for us. Our financial worries came down tremendously. Despite keeping prices low, we managed to make profits every year,” he says.
By 1994, Sattar and his brother had decided to separate from their uncle, who owned part of the business for the past five years. “We had covered a lot of ground in the business and wanted to work independently,” says Sattar. But their uncle was against this. “As we were determined to set out on our own, we calculated the value of our business, which worked out to Rs 32 lakh. We handed him 50% of it over a period of time,” he says.
The success of the first Genesis store encouraged Sattar to set up a second store called Basics, which mostly sold casual wear. In 1997, he opened his first upmarket store called Genesis Basics in Nungambakkam in Chennai. He invested Rs 50 lakh of his own and took a bank loan of Rs 1 crore for this. To meet the cost of the outlet and other overheads, Sattar started keeping all his outlets open on Sundays as well. The initiative not only boosted sales but also paved the way for 365-days shopping culture in Chennai. A year later, he opened another outlet, this time taking the franchise route. The same year saw him establishing an outlet in Colombo.
In 1999, Sattar formally incorporated his company as Hasbro Clothing Pvt Ltd. By 2001, he had decided to open outlets in other cities as well. He also set up a new production facility in Bengaluru: “Our work expanded considerably, so a manufacturing facility with designers, R&D and logistics was the need of the hour,” he says. In 2006, he launched another brand—Probase—a combination of formal and casual wear.
Today, Sattar has 40 outlets, of which 12 are franchisees. In the next three years, he plans to open another 100 outlets. Sattar is targeting a turnover of Rs 195 crore in three years, having already clocked a turnover of Rs 70 crore. Judging by the distance he’s come, this target is more than likely to be met sooner rather than later.
Source : businesstoday.intoday.in