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Who owns Satya Paul label?

Samyukta Bhowmick | April 09, 2005

As he sits in his Genesis Colors office, it is clear that Sanjay Kapoor has tasted success. His handshake is firm, his speech smooth and his smile unflinching.

And he perhaps has a right to be complacent, for he is the managing director of Genesis Colors, the company behind the Satya Paul label, which is, with sales of Rs 30 crore (Rs 300 million), one of the largest and most successful fashion houses in the country today.

In an industry rife with disorganisation, where designers are a dime a dozen, and the feeling among investors is that it's all very pretty but doesn't mean a lot in serious corporate circles, Genesis Colors can be seen as a pioneer.

Sanjay Kapoor and Jyoti Nirula, former Citibank employees, floated Genesis Colors and took over the Satya Paul label in January 2001, turning what was essentially a family affair into a corporate enterprise, and supplying ties (in which Satya Paul is rapidly making a name for itself, not just at home but abroad also) to foreign brands such as Van Heusen, Peter England and Zodiac.

"We basically recognised that economies of scale can be applied to fashion just as well as it is applied to other industries," explains Kapoor.

"If you're a single designer, you run into all sorts of problems. You have to think about production -- especially if you run a prÍt line (where the real business is) -- and production lines; you have to think about distribution; you even have to think about financing the in-between of the production and the distribution.

"If you're a first time designer, banks are not going to rush to lend you money; you're not going to be able to get rented space easily; people will think you're a risk -- which you are. Also, if you can't afford to produce in large volumes, you'll to have to outsource, which means that much of the process will be out of your hands."

One such designer is Deepika Gehani, who has been on the Mumbai fashion scene for the last three years, retailing at multi-brand stores such as Ogaan and Ultimate.

"I was getting a lot of calls from other stores that wanted to stock my merchandise, but I simply didn't have the internal infrastructure to supply to them," she says.

"I started thinking that it would be nice to have someone take care of the business side of things, so that I could be left free to design, and I would also have enough money behind me to allow me to produce in the volumes that were being demanded."

Enter Genesis Colors. They bought out part of her label, or as Kapoor puts it "put our big business behind her". They have picked her up, as it were, from near anonymity and have promised her three individual stores over the next three months, in Delhi, Mumbai and Kolkata.

It's a great arrangement for Gehani, who sounds very excited: "The business side of things is what really curtails young designers. It's such a relief to have a large house behind me. And it's not just the young designers who look to take this step -- I've heard many mature, established people discussing it also."

But it is the young designers Genesis Colors seem to have their beady eye on, citing their "freshness" and "desire to grow". Kapoor reiterates time and again that fashion is essentially a young industry.

"Fifteen years ago, men couldn't buy brands in the market. Women used to get 95 per cent of their clothing stitched. As time went on, the designers appeared on the Indian scene, but the extent of the industry was wedding lehengas, and it was all couture. PrÍt has taken its time, but it was inevitable that it would arrive, and similarly, I feel that designers will corporatise themselves, and become more structured, like the big fashion houses of the West. Twenty-five years ago, I think that French couture houses were in the same league that we are in now."

For all that Kapoor makes it sound like a natural movement, sort of like evolution or the process of a butterfly emerging from a chrysalis, not everyone is convinced. Raghavendra Rathore, for example, is wary of the shift towards corporate houses.

He himself has, for the last 6-8 months, started diversifying his own company, which has branched into entertainment, as a result of which he's branched out into design software.

His main concern is that a tie-up with a big firm would restrict him to conventional design, something he is not keen to happen at this stage in his career.

"You need to have a long-term vision," he says.

"I think it's best to wait and see where the industry is going. At the moment, no foreign investors, or even serious Indian ones, are interested in Indian fashion. The industry is volatile, and I think the danger is that if you tie up with a large company, you could lose a lot of control in your own product.

"On the other hand, if you tie up with a distributor, you get a lot of the advantages of outsourcing, without losing your own vision. I think that a lot of these big houses are investing mostly for in-house designers. Personally, I think it would be far better to outsource what you have to and keep the real action in-house for yourself."

Asked about outsourcing, Gehani counters that she had thought about retailing, as Rathore has done at Shoppers' Stop with his line Kasbah, but that she felt that this would mean sacrificing much of her design creativity.

"I want to keep designing what I feel is in my line. This includes higher-end pret such as my lines for Ultimate, and I also plan to get into couture when I open my own stores. The main factor for me is that," she says, echoing Kapoor, "I wanted to keep my production in-house. I didn't want to lose any control over that."

It seems that the fashion world is torn. On the one hand, tie-ups with large corporate houses such as Genesis Colors (who are planning more acquisitions over the next three or four months) are clearly a great move for young designers who would otherwise have a steep uphill climb before them to the top (and of course for the corporate houses, who will keep acquiring label after label), but many established designers are still suspicious of this "selling out" as one designer put it, and perhaps rightly so.

Being still in its infancy, the Indian fashion industry (if one can indeed call it one), is still growing; it is failing to attract any real investment or foreign buyers; and the advent of large design houses looks to have arrived considerably before its time.

Some analysts claim that our designers need to build real brands that will sustain themselves beyond the personality of the designer, and only when we have accomplished this and reached real maturity, will the 'industry' be ready to move on to greater structuring, more regulation and most importantly, greater investment and growth.

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