The 9,000 sq ft office of V2 in Delhi’s Mahipalpur suburb near Gurgaon is abuzz with activity. Around 25 executives are either working the phones or typing furiously on their PCs. In the reception area, people with cartons containing IT gear for the warehouse are waiting to be called in. Inside, promoter Ram Chandra Agarwal sits in a glass-panelled cabin preparing for his second coming in retail.
A poster on the reception wall reads: ‘Winners don’t do different things, they do things differently’. It seems to capture the thinking of the man who ran his first retail venture Vishal Retail into the ground-and is back for a second wind in the same business.
So what’s different this time?
V2, which stands for “value and variety”, will sell fashion garments at prices 50-70 per cent lower than other clothing brands through large stores between 12,000 and 25,000 sq ft in size. Seven V2 stores are operational in the country, four in Delhi-NCR, two in Himachal Pradesh and one in Jharkhand.
The company is looking to open 8-10 V2 stores by year-end, which are expected to clock a combined turnover of 8-10 crore a month, says Agarwal. That’s a highly ambitious target, considering the best-case scenario for similar stores of rival retailers is 30-35 lakh per month per store.
Ambition is a familiar word in Agarwal’s lexicon. “I would have been doing a service of 5,000-10,000 per month today had I not been ambitious. Because of this ambitious attitude I landed in problems but then it also helped me come out of them.”
That ambition often translates into statements that smack of grandiloquence. “Mark my words –I will be among top five retailers in India in 3-5 years,” says Agarwal. And another: “Nobody can beat me in finance, sourcing, merchandise and HR.”
It’s not quite easy to believe him after stealing a glance at his past baggage- 750 crore of debt at his former venture, which Agarwal was unable to repay.
Vishal Retail’s downfall was a combination of a few factors. “Agarwal was a victim of cheap money and a rapid expansion. Banks are also to be blamed for this,” points out Amit Gupta, director at Coralbay, a retail advisory firm. Other nails in the coffin include choosing wrong locations and a wrong mix of merchandise across his 150 stores, adds Gupta.
Agarwal admits to some operational lapses. “I chose the wrong locations and expanded without creating a team. The management information system was faulty, we didn’t have any accurate information on supply positions, stock positions or creditor positions,” he says.
Agarwal’s decision to hire management graduates in bulk a year ago also backfired. He brought on board around 200 management graduates from institutes such as IMT (Ghaziabad), FORE and Amity. None survived. “Not all were asked to leave,” says the promoter. “Some left the organization voluntarily. But it was a good learning experience for all.”
Source – The Economic Times