Chaudhary, Forbes India
7 September 2015
look at Dilip Kapur and you will know he wears his brand proudly
on his sleeve: Or, in his case, carries it on his arm. Its
like carrying a story, an emotional bond, says the 67-year-old,
pointing to his Hidesign handbag which, he tells us, is at least
20 years old.
The promoters sentiment also speaks of the Rs 160-crore
companys ultimate goalto emerge as a lifestyle brand
that touches all aspects of a customers life. And its efforts
over nearly four decades have been trained towards that. The last
two years have been particularly busy as it delivered several
firsts. For instance, the Puducherry-based leather
firm unveiled its footwear collection for men and women; it launched
sunglasses and also started offering discounts for the first time
It has also set in place plans for the next five years, says
Kapur, the effervescent founder of Hidesign, adding that the brand
has to go beyond bags, the product group with which it is most
closely associated. We realise that the biggest hurdle in
the development of a brand is to get stuck on one product. Gucci,
they all went beyond bags. I dont want
Hidesign to be just a bag brand, it has to extend into a lifestyle
brand, he says. Over the next two years, the footwear line
is expected to contribute 12-15 percent of the companys
turnover. Hidesign clocked revenues of over Rs 160 crore in FY2015.
It has also posted year-on-year revenue growth of 20-30 percent
over the last four years. At over 60 percent, bags are the biggest
contributor to its revenues.
This growth spurt, perhaps, is linked to the involvement of Louis
Vuitton (LV) with the company. In 2007, the French luxury giant
chose Hidesign to tap into the leather products space in India
and acquired a five percent stake in the firm. While LV does not
generally speak to the media about its investments, in 2007 it
told Financial Times that it liked the homegrown nature
of the brand. LV has been advising Hidesign on branding,
marketing and training.
Hidesigns products are currently offered across over 60
exclusive retail stores; it has a distribution network in more
than 20 countries. Its leather collection includes handbags, clutches,
briefcases, laptop cases, wallets and belts. Apart from the flagship
brand, Hidesign launched Holii, a brand aimed at bringing distinct
Indian design aesthetics to bags and accessories along with high
production standards, in 2009, in a joint venture with the Kishore
Biyani-led Future Group. The Hidesign group also runs two hotels
in Puducherry: The Promenade and Le Dupleix. In 2012, Hidesign
forayed into the luxury segment and launched its range of Ciaschini
bags named after Italian designer Alberto Ciaschini who joined
Hidesign as lead designer in 2004.
The person behind it
For Kapur, it all started in 1978 as a hobby from a thatched
shed in Puducherry. He had just returned to India from the US
after earning a PhD in international affairs from the University
of Denver. He seed-funded his hobbydesigning
bagswith Rs 25,000, using the money to buy a sewing machine
Since then, an adherence to quality has defined Kapurs
approach to the retail business. And his persistence seems to
have paid off. For instance, Hidesign is the only firm in the
country in which Louis Vuitton has invested directly and not through
its PE arm, L Capital. But thats not enough for Kapur, for
he has another milestone to cross. An IPO will happen for
sure, but not right now. We will consider it when we have a top
line of Rs 400 crore, he says. In any case, Hidesign is
in for the long haul, he adds.
Why it is a gem
Hidesigns aesthetic focus has been on a classic contemporary
look, catering to the educated and sophisticated urban professional.
The company has three design teams based in Milan, London and
Puducherry that work together to create two new collections a
year. Besides its seasonal collections, Hidesign has a classic
range of products that have seen minimal change for thirty years
and continue to garner customer appreciation.
Also, the company has been able to hold its own in what is a
very competitive handbags market, comprising organised and unorganised
players. Over the last few years, brands like Lavie, Da Milano,
Baggit, Caprese, Lino Perros and Esbeda have come up and are dominating
the space. Not only are these brands cheaper than Hidesign (which
plays in the Rs 3,000-8,000 price range), they also offer huge
discounts, sometimes as much as 50-60 percent, during the sales
season. Kapur is not overly concerned about the competition though,
saying the Indian handbag story is a game of Chinese imports and
Hidesign is not that.
Though a price war is not a part of Hidesigns plans, staying
affordable is. For the first time, Hidesign has started offering
discounts. Kapur says its a market compulsion.
We would be the only shop in the malls not to offer sales
and our staff would complain, he says, chuckling. But
our discounts are not like others. They are small, only for handbags
and are never more than 25 percent. The sales are never on classics.
Instead of going through distribution channels, the company is
now working on a direct presence in overseas markets and is in
the process of setting up its US business in California; Kapurs
son Vikas is overseeing that. Experts say the biggest USP of
Hidesign is its product. Its not a mass product, its
not a copy of others and its not a me-too product,
says Devangshu Dutta, chief executive, Third Eyesight, a retail
And finally, Kapurs openness to adapt and change helps.
We believe beauty comes naturally
it is in cotton
and linen, not synthetic or nylon. Are we getting into clothing?
No brand can survive without getting into that, says Kapur.
Apparel is a bit too early for us but we will get there
in five years. Apparel is the final step. Typically brands get
into apparel late.
Why it was hidden
Despite operating in the retail space, Hidesign isnt quite
an over-exposed name yet. Its premium positioning and pricing
has restricted it from becoming a mass brand in the leather products
category. Shying away from regular print and television advertisements,
Hidesigns promotional push is comparatively niche and targeted
predominantly at an aspirational urban clientele.
The leather goods manufacturer has also stayed away from celebrity
endorsements, a common trend in the retail and lifestyle business.
Further, the Hidesign brand is synonymous with the handbag business
and very few are aware of its footwear line, its ecommerce portal
or its presence in the hospitality space.
Risks & challenges
One of the variables that this business faces is that its products
are made from cow leather. With tanneries shutting down in cities
like Kolkata and Kanpur, procuring leather has been a challenge.
There are, of course, also the global protests regarding the ethics
of using leather.
Then, there is the expert view that Hidesign needs to spend more
time in India before it gets into brand extension. Globally,
it is the second or the third generation that goes for brand extension,
says Harish Bijoor, chief executive at Harish Bijoor Consults
Inc, a brand consulting firm, adding that creating too many categories
can affect the companys focus.
Dutta of Third Eyesight says brand extension can be undertaken
by a company only if it is confident of maintaining the consistency
of its product quality. He adds that it is imperative for companies
to understand that brand extension works well in adjacent categories.
It should not devalue the brand, he says. Especially
not one that the promoter himself likes to wear like a badge of
(Published in Forbes