Home > Business > Special
Footwear's fast-moving star
S Kalyana Ramanathan |
January 17, 2004
He's famous in the global footwear industry as the man who runs an extra mile with famous footwear brands.
Three months ago he wowed the industry once again when pop singers Justin Timberlake and Christina Aguillera were spotted wearing his newly-acquired Pony brand fashion footwear.
In fact, you could say that Killick Datta has the world -- or, at least, the footwear industry -- at his feet.
Datta is the CEO of California-based Global Brand Marketing Inc (GBMI), a company that's walking away with all the right awards in the footwear industry.
One year ago the company -- which has grown from $6 million in 1996 to $300 million in 2003 -- won Footwear Magazine's 'Company of the Year' award. One year later Datta won the magazine's 'Man of the Year' award.
For good measure Time magazine recently listed him as a 'Worldbeater'.
Fortune magazine said his firm was "gaining notoriety in the sluggish footwear industry."
A few days ago Datta took the Chennai footwear industry by storm. He breezed into town, visited all the top companies and announced that he would be placing orders worth a few million dollars with a handful of them.
What's the secret of Datta's success? GBMI has trodden a path that nobody else had really attempted before it. The company takes global licences to sell footwear for famous clothing brands -- 'clothing for the foot' as Datta likes to call it.
The result is that today GBMI is the global licensee for leading brands like Diesel, Mecca, Nautica and XOXO. The company also owns two brands Dry-ShoD and Pony.
The footwear odyssey began back in the mid-'90s when Datta, who had worked for a string of top footwear and apparel companies, managed to wrangle a half-hour appointment with Renzo Rosso, founder-owner of premium denim brand, Diesel.
At the time Datta was still an executive with Skechers, the world's second largest casual footwear brand.
Datta had a very clear gameplan: he aimed to get a global licence for a giant brand like Diesel. Why did he want to be a global licensee? He had worked out all the options and figured that all the others would be too expensive.
"I met Renzo in Venice. Initially he was uninterested as I had no company, designers or employees of my own then," says Datta. "He got interested in my business plan though. The meeting lasted for more than four hours," he adds proudly.
When Datta returned to California, he was convinced that nothing would come of the meeting. A month passed without any word from Italy.
One spring morning, when he was getting ready to leave for office (he was still with Skechers) he received a brief fax, asking him to catch the next plane to Venice to accept the global licence for Diesel's footwear business.
That was the big break he needed. Since then he has pulled off similar deals with some of the world's best brands. "Today I get offers to take global footwear brand licence from almost a dozen companies every week," he says.
The company is also developing greater ambitions. It made its first acquisition in November 2002 when it bought Dry-ShoD for $8 million from an Italian designer. That was only the first step in this direction. It then bought an ex-Adidas brand called Pony.
Buying Pony turned out to be a major coup. The brand had, originally, been launched by Adidas, which then began to worry that it might undercut its own main brand. So Adidas sold the brand to The Firm, a world-renowned talent management company for $60 million.
Now Datta is firmly on the takeover trail. He is in talks with Italian and American shoemakers to acquire four more brands, two each in the US and Italy.
The budgeted price is roughly $100 million each. Datta is aiming for a turnover of $600 million by 2007 and he plans to hit the $1 billion mark by 2008.
That's an ambitious target but the company has overshot all its targets since it was founded in 1996. Datta says his company has grown 17 times in the last three years.
Datta has come a long way since he was packed off to Oxford, UK when he was just 15. "My father wanted me to get the best schooling and he was fascinated by the idea of his son studying in England."
His father had clear ambitions for his son. So, Datta graduated in chemistry and biochemistry.
"My father wanted me to work for a chemical or pharmaceutical company. He and some of my uncles have held very senior jobs in companies like Hindustan Lever, Burroughs Welcome and Greaves Cotton. For my father the footwear business comes way down the value chain," says Datta.
The footwear business stepped into Datta's life quite by chance when he was studying for an MBA at Durham University in the UK. One day he was wearing Adidas gear and relaxing in the college cafe after a soccer training camp.
Nike's then president for international operations, Brendan Foster, was undergoing a refresher course at Durham. Foster walked up to Datta in the cafe, pointed at his shoes and brusquely ordered, "Take that s*** off."
In return, and to Datta's surprise, Foster offered him a complete soccer kit free and a stint as project trainee at Nike to complete his MBA. Datta, who already had an offer from Procter & Gamble, agreed much to his father's fury.
In 1979, when Datta joined Nike's international business, the company was selling footwear worth around $160 million. He rose rapidly and quickly ended up in charge of international business.
These were good years for Nike and five years later when he left, the brand had a turnover of $1.3 billion and had became a force to reckon with in the global sports footwear market.
From Nike, Datta moved to LA Gear, another major sports outfit company. There, he headed the company's international business and was part of the team that took the company from $8 million to $1 billion sales.
Datta quit before Disney took over LA Gear. After LA Gear, he became president of a company called Wolverine Worldwide. Though it was an enterprise he partly owned, he quit when his former boss at LA Gear invited him to be president, international in a new company called Skechers Inc. The company became a $900 million company in a short period.
Nevertheless, his wife kept pushing him to start his own business and finally he succumbed to the idea. Today GBMI does everything for its licensed brands. In fact the company has a team of around 50 designers who turn out around 2,000 designs a season.
Says Datta: "The life of each design is limited to a season (six months) or two. The designs are ready more than a year and a half before they hit the market."
It isn't cheap to hire designers. Each one is paid around $200,000. Licence fees to the brand owners are also high. Diesel is paid 15 per cent of the revenue as licence fee from the sale of Diesel footwear. "It's a good brand and is worth it," says Datta.
What's next for Datta? That's very clear: the billion dollar mark. And that means he has to put a lot of shoes on shopshelves around the world.