Weaving Success - S Susindran, CEO, SABARE International

Weaving Success
10 Sep, 2007, 0226 hrs IST,Vikas Kumar, TNN

He's a man after Sam Walton's heart. S Susindran, 42, founder CEO of Sabare International, believes that the beast of Bentonville, as Wal-Mart is also known, is misunderstood the worldover.

"Their margins are very low, and what they extract from their suppliers goes towards maintaining their price advantage." Susindran has proven through his own model that working with the global retail giant — or for that matter, any large retailer — can be rewarding if one adopts a collaborative approach. "If you can understand the challenges of a retailer beyond just selling the product, and think one step ahead, you can grow."

It's this mindset that has helped Susindran build his fledgling home furnishings business, which includes bed linen, bath towels, dining table cloths and kitchen mats, to a Rs 375-crore company with a global footprint. Today, Sabare has clients such as JC Penney and Home Depot, in addition to Wal-Mart, across the US, Europe and Australia.

For this former Chartered Accountant from Karur, which is the home textiles hub in Tamil Nadu, the "burning desire to make it big in the textile industry" was what led to a two-year stint with a textiles manufacturer before he started his own unit in December 1992.

Early on, Susindran figured he would need an innovative business model to stand out among the hordes of home textile exporters in his hometown. The seeds of this model were sown while working with a US-based importer who represented Wal-Mart. "I thought if we could align directly with Wal-Mart or JC Penney and cut out the middlemen, we could do much better," says Susindran.

He reviewed the supply chains of major retailers by engaging small consultants to survey existing models and visiting retail stores and distribution centers in the US. After that, Susindran came up with his own framework, which he calls the Total Retail Solutions model. For two years, he travelled extensively to the US, making as many as 14 trips a year. And as costs went up, he borrowed money from various sources, including a Rs 5-crore loan from Canara Bank. "It was equivalent to my sales at that time," he says with a chuckle.

But those were trying times. Susindran recalls, "For our size, it was a big risk. My colleagues and associates thought I was insane to be sinking money into something that was not visible. But I had the conviction that the business model would work."


And eventually it did. With the success in the US market, Sabare's turnover grew 100% year-on-year and its client roster now includes most big names in retail. In 2005, it invited the India Growth Fund, a private equity fund managed by Kotak Mahindra Bank, to invest Rs 30 crore in his company.

So confident is Susindran about his model that he intends to apply it to other businesses as well. "I would love to take it further beyond textiles, in the long term," he says.

And if this is not much, he's looking at the domestic retail market as well. But right now, he's taking his business model to other countries starting with the UK, and is in talks with IKEA for supplying to them. With a recent investment of Rs 100 crore Susindran isn't settling for anything less than big. "Our goal is to touch Rs 1,000-crore mark by 2010 and become a billion-dollar company by 2015."