Building on a rich legacy, Lalbhai scion pushes Arvind Ltd to new frontiers

Kulin Lalbhai is the fourth generation of the Lalbhai family and is now an Executive Director on the board of Arvind Ltd, India’s largest company dealing with textiles, brands and retail. Kulin, an MBA from Harvard, represents the fourth generation of the industrious Lalbhai family which has built one of the most successful business enterprises in the country. The company is valued at ~4000 crores and continues to grow and expand.

In an exclusive chat with YourStory, Kulin shared his experience and his journey along with an insight into how successful business enterprises are built.

Lineage and history of evolution of the company

In 1931, Kulin’s great grandfather Kasturbhai Lalbhai established seven textile mills of which Arvind Mills was the largest. The company was established in December of 1931. Kasturbhai had a keen business sense and made the foray into the textiles sector early. Progressively, Arvind Mills came to dominate most of the other mills. Some of the others were shut down or merged subsequently with Arvind Mills. In the 1980s, the company was valued at 100 crores. Two decades later, it is worth more than 6600 crores. The company was renamed Arvind Ltd from Arvind Mills Ltd in 2008. At present, it has over 25,000 employees and even though the core focus of the company remains textiles it is now a small conglomerate. Besides textiles, the company also invests in brands and retails; not only its own brands like Flying Machine and Newport but also licensed international brands such as Arrow and Tommy Hilfiger. Kulin tells us that they see themselves as incubators for anything and everything to do with fashion and retail in India.

What worked for the success of the company?

The keen business sense of the founders and their ability to foresee and predict market changes and trends in the future, and respond to them has contributed extensively to the success of the company. To begin with in 1931, the foray into textiles was an extremely intelligent move. The world was recovering from the 1930 depression and the textile industry in particular was impacted on a global scale. It took a lot of foresight and acumen to spot the hidden opportunity and capitalize on it. Textiles generated cash and the consumer base was already present. However, textiles alone, even though profitable, are asset intensive and rarely create valuation from the stock market. Once again responding early to and driving demand in the 1980s the company brought in denims into the Indian market. Hence, from the time of its inception the company has always predicted and responded to market forces ahead of time. Continuing in this spirit, Arvind Mills Ltd started bringing in foreign brands into India as early as 1991. “We were the first ones to bring the foreign brand Arrow into the country in 1991,” says Kulin. Since then the company has invested in building and licensing many brand such as Lee, Wrangler and Tommy Hilfiger. Today, Arvind Ltd is more of a B2C company as compared to the B2B Company that it started out as. Brands and retail today constitute a major focus area of the company.

According to Kulin, the main factors that have contributed to the company’s success include:

1) Getting into a focus segment in the market early and building on it.

2) Foresight to have a strategy ahead of it’s time to respond to changes in market forces.

3) Repeatedly been able to envision what is to come and realize future challenges early.

What constitutes for enduring success?

Arvind Ltd today emphasizes on creating the right culture of integrity, honesty and transparency in today’s fast changing world. This combined with the ability to foresee and respond to changes in market dynamics has worked in the favor of the company’s success. The company that started as a family business, professionalized early in the 1990s and this really helped the company scale up. The other factor that cannot be undermined is the relationship that exists between the stakeholders in the company. Kulin says he sees Arvind Ltd more as an entrepreneurial setup. They are forever interested in investing in innovation and new ideas.

How is the company responding to the current pressures of the market, e-commerce trends etc.

According to Kulin, e-commerce is a great opportunity for the company as they own so many brands. Thanks to e-commerce, they are now able to expand the reach of some of their brands such as US Polo to even tier five cities in India.Kulin says that the company follows a portfolio brand approach to meet market challenges. They keep adding relevant brands to their portfolio based on market trends and sometimes move away from brands that are not relevant in the space. The key, according to him, is to ensure that the portfolio brands are fresh and in tune to market trends.

Was joining Arvind Ltd a conscious choice or a default option?

Kulin says he had always wanted to be associated with the company, and that it was a conscious choice. He says he sees businesses and enterprises as a platform to initiate change, incubate ideas and encourage talent and is therefore very excited to be a part of this space. In his view, a private enterprise has the ability to transform the country. To him the term business has a broad definition; it is the fabric of society. Working in Arvind, he has the opportunity to impact the lives of 25,000 employees directly. According to him, “A business, a company is bigger than us, build it well and it grows on and on. It is an excellent platform to contribute to society.”

What are the biggest challenges that Arvind Ltd faces today?

According to Kulin, the market today is exciting and challenging. It is a great time for brands and retail with the consumer boom.

He feels that since they are now a conglomerate with textiles being one of the many areas of focus, there are new challenges. The challenge is to build scale and to make the company profitable while maintaining value. He says that in today’s world the markets change rapidly and global trends change continuously. Hence it is very important to be ahead of the pack and ensure that strategies and foresight enable Arvind Ltd to position itself in a manner so as to take advantage of and recognize every possible opportunity. He hopes to build it to a company that people identify with and relate to as an excellent employer brand.

What are the CSR initiatives that Arvind Ltd engages in?

The Lalbhai family has always been very active on the education front, especially in Ahmedabad. They have been very involved and have helped develop institutions like IIM-A. At present, their CSR initiatives focus on:

a)     Organic farming. They are supporting organic farming of cotton in Maharashtra. This is being done in 50,000 hectares of land and they are helping the farmers optimize their yields as well as their profits.

b)     They have large education initiatives for slum dwellers. The main focus and target of this initiative are the children of the laborers of the company. They support children in with a focus on math, English and computer science in Ahmedabad.

c)       They also have health-care initiatives for all their laborers.

What can we expect from Arvind Ltd in the future?

Kulin says, “You should watch out for the brand business; we have many innovative and exciting brand ideas for the future. We will also enter some sort of digital play in the near future so do watch out!”