Interview with Smit Patel

Smit Patel
Director
Vritika Lifestyle

Crossing a generation gap

Riya Trends and Vritika Lifestyle are the textile divisions of the ₹2200-crore Surat based MK Group which has interests in construction (Hindva), diamonds (Carbon Creation), and mining and allied industries (Marvelore). A family of Khenis and Patels, the business was set up six decades back and now GenNext is expanding the horizon. While Riya is a production house manufacturing indutvas or ethnicwear for big brands, Vritika is only into saris and lehengas. Target next is to get into men’s shirts, and a step into footwear too. Richa Bansal in conversation with the dapper Smit Patel, who notched up a turnover of ₹55 crore last year at the helm of this textile division.

When did you step into textiles?

In 2006, my father had a vision of getting into textiles. There was a misconception about textiles being cheaper in Surat, and so he came up with something that talks quality. We command a high price in the market and yet our production house has pending orders for four months, and during peak seasons, even six. We are equipped with the best high-end machinery. We started with six machines and have around 120 right now. We have about 700 workers on our payroll, and 45 more in the designing team, the management and creative teams. The overall number includes the four chief masters who are into sampling, and around 80 who are into the final stitching.

Tell me about Riya.

The textile division has two companies-Riya Trends and Vritika Lifestyle. Riya serves as a vendor-a production house that manufactures for different companies who then sell it under their own brand names like Vipul Sarees, Vinay, Sanskruti, Sasya, etc. Vinay, one of the biggest names in salwar-kameez, etc, is our biggest client. We design the entire silhouette-be it the detailing or the embellishments, the labeling, and also the packaging.

For Riya as a unit, what is its turnover? What are the future plans?

Annually, we had a turnover of ₹55 crore last year. The future plans include coming up with a menswear line in the next eight months. This will be only shirts for men to begin with.

What is the ground work that has been done for the men's line? Will it be launched as a brand or will you serve as a vendor again?

Hindva is coming up with a multiindustrial park called Hindva Dreams for small to mid-size units. Here we have taken up a 62,000 sq ft plot of land for weaving for men's fabric. Both Riya and Vritika will be doing the manufacturing work, and alongside we will also be working on a brand. We will make sure that the shirts come out very well. Recently, we started working on a venture for men's shoes as well. We had a meeting recently, and are finalising the product which is being sourced from Italy. We are creating a brand out here. It will be there in the market, mostly on e-commerce sites and in the arcade of a boutique hotel concept that we will soon come up with.

When will the industrial park be operational?

It will be operational by this December, and the facility will have weaving only for high-quality cotton for menswear.

What facilities will be available here? Where are you getting the yarn from?

To begin with, there will be 60 Picanol rapier machines; normal ones with 200 width. Picanol are the pioneers in weaving machines; they are the best. We will be getting Karl Mayer warping machines as well. With all this, we will invest topnotch quality in our product line.

We get the yarn mainly from Ahmedabad. The spinning industry in Gujarat has evolved a lot since Prime Minister Narendra Modi's call for 'Make in India' and the subsidy policy for spinning units. A lot of people have since opened spinning units. Gujarat has a lot of good quality, but it was being sent to the South for spinning from where it used to come back here again. But now, there are a lot of spinning units here as well. So, sourcing of good quality yarn and cotton is no longer a big deal. This has helped us minimise costs and focus on quality.

Anything else related to the textile industry within the industrial park?

Around 30 companies are coming up with their waterjet units inside the park. We are trying for verticals from the entire textile value chain. We have got a good response from spinning companies, and also the finishing and packaging industry. As the demand is met, people will start setting up their units there.

Where do you source your fabrics from? Where do you source your stones, gotta patti and all of these embellishments from?

We source the fabric from Surat, Delhi and at times Kolkata. We have a sourcing team which is dedicated to sourcing laces and stones. There are a lot of small-time firms for laces. Surat can cater to the entire textile value chain-right from yarn to embellishments and finished products in shops.

What is the kind of meterage that you buy annually for your Indianwears-salwar-kameez, saris and churidars?

Our products are mostly for the 30+ woman. The meterage depends on what is the market right now. On an average, we buy at least 50,000 metres of fabrics for all our garmenting.

What is the average productivity at your manufacturing unit in terms of man hours?

In the stitching department, the labourers are not paid per hour. So, they work 9-10 hours. They are paid per piece that they make. Most of the masters are freelancers. All of them are paid on how much they work. Stitching is one of the most technical parts. So, they get paid up to 45,000 a month.

What is the pay that you give to pattern cutters, etc?

Pattern cutters are paid ₹70-80 per piece for a suit. The companies we work for don't require sizes. They might have different size demands, so we try to keep it free size for most of them.

Now, let's talk about Vritika.

Vritika has around half the turnover of Riya, as it has just been two years. Since we were providing to so many companies, and they were doing really well, we thought of starting our own label. Two years back we launched on a trial basis. We had a small quantity order, but that went through the roof. We had a strict policy of wholesalers, and they took it to the market. We never went to the market ourselves. We kept it simple-a few fixed dealers and no return policy, etc. That policy helped us a lot. The capacity right now is 12 catalogues a year. We are trying to make it two catalogues a month.

So, you are not stepping into retail with Vritika?

That's the third step. Hopefully, we are going to open up a small retail unit soon and see how the response is, what is the market, what is working what is not, and through that we might go into the market itself-you know, big malls or different places. The world is going to be a testing ground for a lot of things, including shoes, shirts, and slowly and steadily, trousers.

And, will you be going for a complete lifestyle product line?

Yes, that is the vision. A complete lifestyle provider-head to toe for both men and women.

Suppose someone wants to be an agent with you, what are the yardsticks that you would measure before you take on anything?

First is reputation, which is a key attribute. We then look at the minimum quantity-at least 100 sets, with 10-30 pieces in each set in various colour combinations. The embroidery will be the same, but the colour palette will be different.

What is the targeted growth you are looking at?

We are easily meeting the 12 catalogues a year target. We want to explore new things like tying up with Liva, so that we can have new fabrics. We would like to come up with 24-a-year catalogues. And after that has happened, we would like to explore the online market through our own label.

Have you started already in that direction?

Our stuff does go online through Jabong and Myntra. And they have highlighted our products many times under the brand name of Vritika Mesmer. This is because we tied up through a JV with a company called Hypnotex. The name was Mesmer. This one is for our online venture. Again, we gave our products to them, and they gave it to different online markets. It's like a wholesaler, but through a different channel. It goes to Myntra, Jabong, Cbazaar.

From which website is the response the most?

I will say Myntra.

How many pieces are going online?

Collectively, if the market is good, approximately 20 pieces go per day per site. And if markets are slow, it can be 5-6.

What is the tie-up with Liva like?

Liva is providing us the complete fabric line. We will make one catalogue dedicated to Liva. And if it works out, we will probably have more.

Where will this catalogue go to? Will it also go to the Aditya Birla stores?

First, it will mainly be available through our channels. But it will be separately marketed as Liva Fabrics. The labeling will have both Vritika and Liva. The number of retailers might decrease, because not everyone keeps the catalogue. We haven't got a list yet, and the channels are being decided by Aditya Birla and us together. For now, the wholesalers who use both the labels and the online channels- ones who can highlight both the labels-will be chosen.

Which are your export markets? How big is your export division?

We don't export directly. We do the label work for companies, and they export. For example, in Vinay's case, 80 per cent of the work goes to Dubai, Bangladesh and Sri Lanka. They sell only 10-15 per cent in India. Most companies we have worked with have a big market in Dubai, Bangladesh and Sri Lanka.

So, you have no plans to go into exports in the near future?

For Vritika itself, yes. We have spoken to 2-3 entities. We are going to start with Sri Lanka, where there is a demand for this product. The brand value in Sri Lanka and Bangladesh is good in terms of embroidery. If the label clicks, it will go really big.

What changes, as GenNext, have you brought into the business?

A completely new ERP system was developed. Earlier, everything was done manually. If there was an order for 300 pieces, it would be written on a piece of paper-in a format of course. It would be distributed, and that would be it. If the paper was lost, we wouldn't know if the order was done or not. As soon as I came over, I developed software as I have an IT background. There were just four members working on it for changes and improvements. And later, people were handling it as a team of nine members. Every department has one such software with an inward and outward entry. We know exactly where the pieces are, and what has been made. Wastage figures have dropped from around 12 per cent to less than 2 per cent. Earlier, if there was an order of 300 pieces, around 330- 340 pieces would be made because there was just an idea of the number being made and no exact figure; now the exact figures are being traced. Now, we have an order of 303 pieces that are being made. We have an account of which department it's lying in. As a repeat order, we know that there are three pieces already. So, we can make those three less. Overall, the wastage figures are less.

What are the expansion plans for Vritika?

For Vritika, we have expanded the market to nine states in India. Slowly and steadily, we are coming up with dealers who meet our demands, and we theirs. Business is growing in that sense. Then of course, I am looking into the shirting division as well. So, our plan is ready.

What is the overall future plan for your men's line? Where do you see Riya and Vritika?

I want to make sure that these products go into the retail market as well, and set up my own hysical stores, for shirting, womenswear,shoes as well. I don't know how it will turn out, but that's the future plan of the business.

Published on: 10/10/2016

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.