Designs on your Wallet.

Designs on your wallet

FROM a small operation run from the terrace of his house to getting luxury brand Louis Vuitton (LV) as an investor, it has been a long journey for Dilip Kapur and his leather accessories firm Hidesign. There have been a few changes along the way — more factories, more outlets, more countries but the underlying philosophy has been the same — emphasis on design, utility and craftsmanship, and most importantly, keeping it natural. It was this philosophy that won the luxury brand over to Hidesign. Dilip Kapur, founder and president of Hidesign, talks about the company’s journey, the LV investment and the road ahead.

How did the LV investment happen? Were there other contenders for the investment?

We did not approach LV. They came to us. They were looking for global sourcing locations and as part of it they were evaluating multiple countries — China, India, Vietnam. The French embassy had recommended visiting our factory in Pondicherry. They liked what they saw — our approach to work was very similar to theirs. Our focus is on leather craftsmanship not mass manufacturing. Also, we don’t use anything artificial in our products — for instance, we don't paint or emboss even if it means giving it a neater finish.

What does the investment mean for Hidesign? Will you also make bags for LV?

No. We are very clear that we will sell only under our brand. We are not interested in being an outsourcer to LV or any other brand. Will help each other but we will maintain our separate identities. We are helping LV to set up a factory in Pondicherry that is coming up adjacent to one we are setting up. In return, we will learn from the 150 years of experience LV has in leather. Their technology, systems and technical expertise are far superior to any other player.

Were there other offers for investing in Hidesign?

Yes, there were many. But we were not interested. They could not have added much value to what we were doing. LV, on the other hand, brings 150 years of experience in working with leather. So, we immediately said yes. We have a lot to learn from them.

DILIP KAPUR Founder & President , Hidesign

What is your current capacity? What was your turnover and profits for FY07?

We have two factories in Pondicherry and one tannery in Chennai. A third factory — the one I spoke about — is coming up on 30 acres of land. Our current capacity is about 25,000 bags, 30,000 wallets and 3,000 leather jackets a month. The FY07 turnover was around Rs 100 crore with a net profit of Rs 12 crore. We have been profitable from the first year of our operations.

Was there anything else that you did differently that worked in your favour in the LV investment? For instance, you started retailing over seas before you started in India. Was that a strategic decision?

Not really. It just happened. At the time we started, our product was a very rebel, alternative lifestyle kind of product. The other products in the market were well-finished, sleek. Ours was rough and vegetable tanned. This type of product is mainstream now but back then there was no market for it in India. Those who started retailing it London, San Francisco, Melbourne were also cultural rebels. We opened our first store in India in Bangalore in 2000. By then, India had opened up, there were more women professionals — things were changing. We now have 38 stores in India and 15 overseas that we own ourselves overseas.

The Hidesign logo, how did that come about? Did you hire a professional firm for your branding strategy?

The logo was designed by a friend. Again, it wasn’t like we hired a professional firm for it. The only thing that we’ve focused on consciously is quality. We have a lot of integrity and we recognise customers are not dumb. In fact, till recently, we didn’t even have CFO or CEO. We hired a CFO three years ago, a CEO two years ago and a COO this year. The business was proprietorship. We are only now incorporating Hidesign Design Pvt Ltd because of the LV investment.

I started the business with Rs 25,000 from my personal savings. I really didn’t think of it as a business at that time. It was more a hobby run from the terrace of my house. Then we moved to a bigger house, then four houses, we kept expanding. We set up our first factory only in 1990.

Where do you see yourself in the future?

We will venture into other related accessories. It could be, say, something to do with paper, like a small pad. Or textile. But our focus will always be ‘natural’. More immediately, we are working re-designing the interiors of our stores. From cream and dark brown that are very masculine colours they will become blue and white. We will also expand overseas, have more of our own stores. In a few years, the plan is to take our exclusive stores from 15 to 60-100.

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Author: N Shivapriya is the cheif editor in the Economic Times and the article appeared in one of their successful columns called "Starship Enterprise" in the edition on 7th Sept 2007.