Interview with Mr. Deepak Seth

Mr. Deepak Seth
Mr. Deepak Seth
House of Pearl Fashions Limited (HOPFL)
House of Pearl Fashions Limited (HOPFL)

..our ports have still lot to learn from Hong Kong and China where exporters can handover goods on day of sending the vessel.
Established in 1987, as a single apparel manufacturing unit in India, House of Pearl Fashion Ltd (HOPFL), today, is reckoned worldwide as conglomerate that embarks annual business volume in excess of INR 2285 crores (March 2011) and caters to the big ticket retailers all over the world. Indian at heart, truly global in operations and offerings, the company operates into 12 strategic locations and six continents leveraging the strengths of each country in creating a strong value for its clients. Over the years, making it a scalable business, the company’s sourcing division has developed strong partnership with more than 150 factories across Asia, and offering warehousing solutions in UK & USA with capability of handling 25 million pieces annually. On manufacturing front it has in-house capacity of 50 million pieces per annum spread over more than 1.5 million sq feet of built up area. Founder Mr. Deepak Seth, born 1951, is the non-executive Chairman of the HOPFL. He has done Bachelor of Economics from St. Stephen’s College, Delhi and Post Graduate of Business Management from Jamnalal Bajaj Institute of Management, Mumbai. He was elected to the Apparel Export Promotion Council in the years 1990 and 1993, and has been inducted to the Executive Committee of the Apparel Export Promotion Council as a special invitee. Mr. Deepak Seth, in a word with Ms Madhu Soni, Sr Editor & Correspondent- Face2Face, shares key to success and future growth pattern in HOPFL’s unique business model- the global supply chain with complete control on the entire value chain from design and development. The excerpts:

It’s a pleasure to host a talk with you, Mr. Seth! Your Group embarked turnover of Rs. 2285 crores for the year ended (March 2011). To start the talk, please take us through this grand Success journey, and the mantra behind?

FY 2011 saw House of Pearl Fashions become the largest garment supply chain company in India. Our unique business model of manufacturing combined with outsourcing through partner factories in different countries like India, Bangladesh, China, Indonesia and Sri Lanka have given us a huge advantage over competition and made us a strategic partner with some of the largest retailers in the western world. Added to our global manufacturing outsourcing infrastructure, we have designers based in New York, London, Hong Kong and India who work closely with customers need and requirements. The mantra of design team is ‘Product Engineering’ specific to retailers.

So, which top brands HOPFL has in its current client list? Can you share about some of the significant deals? Why these brands prefer HOPFL over others?

The top brands we work with are Gap, ESPRIT, Express, Next, JCP, Macys, Kohls etc. We have strategic relationship with some of these brands and the business with most of them is growing almost 20-30% year to year. We get production space bookings, fabric commitments and long term planning budgets which is quite rare in our industry. Our very strong sampling / product development cells turnaround samples some time within 24 hours and our production lines have ability to produce test orders of small quantities supported by large quantities and repeat orders are executed in time with excellent quality.

In general, textile-apparel companies run with high working capital. In the case of HOPFL it is positioned much better – how do you manage working capital so efficiently? In India and other countries, who else has similar business model like yours?

Our model works on just in time delivery where by delivery flows ensure that the customers do not have to sit on larger stocks which in turn reduces the working capital requirements and reduces costs to the supply chain. We focus on inventory management, be it fabric, trims, accessories/garments. Our model is very similar to Li & Fung model in many respects.

May we also request your outlook for future growth and opportunity?

The out look for the industry is challenging because of the world economic crisis. Fortunately, House of Pearl Fashions with its unique infrastructure is well placed to grow 25-30% year to year. As the going sets tough there are huge opportunities because of the consolidation going in the supply chain at manufacturing and retail level. We are in the right countries for manufacturing and in right countries for marketing and distribution world wide. Going forward our focus will be to grow bottom line and give good return to our investors and share holders while at the same time ensuring 25-30% growth in top line.

That means as per the mentioned growth rate of 25-30%, your company will reach the top line of billion dollars by 2014. What growth factors will be driving this?

This would be in principle an organic growth leveraged through present capacities and strengths of the group. However, we are open to M&A too, provided it best fits our visions.

In addition, HOPFL has invested significantly on IT networks. Has it benefited in growing the business and acted as competitive edge?

We invested in IT solutions and have implemented SAP across our supply chain. SAP has helped us to bring transparency into the different processes of management and have made the entire supply chain very efficient. Long term it will also bring cost savings and better handling of wastage control, better yields and better returns.

Mr. Seth, Fibre2fashion is launching special feature on supply chain management focusing on apparel industry worldwide. In this context, we would like to know your comments on challenges and concerns allied to logistics in textile-apparel sector in India.

India has a very weak infrastructure resulting in very huge challenges to logistic especially for manufacturers who are not in port city. Also our ports have still lot to learn from Hong Kong and China where exporters can handover goods on day of sending the vessel. In India shipments have to be handed over a week or 10 days before sailing resulting in delivery time reduction causing massive pain in extra costs to the garment exporters. Also the connectivity to vessels schedule is no where near the frequency we get in Singapore, Hong Kong and China. There is a lot of work to be done in the field of cargo movement both inward/outward. If we have to compete with the likes of countries like China, Indonesia, Sri Lanka etc. serious thought has to be given to ensure improvements.

Your group also associates itself with field of education, imparting knowledge. can you bring out more about Pearl Academy of fashion, and developments therein?

Seth family promoted Pearl Academy of Fashion in 1993 with an objective to impart education to students for the garment export industry which was really starved for technical support till Pearl Academy of Fashion came up. There was lot of trial and error in garment export industry causing huge waste of time, money and manpower. Today Pearl Academy of Fashion has been ranked as No.1 private institute in the fashion industry with almost 2000 students in the campuses in Delhi, Jaipur and Chennai. The alumni of Pearl Academy of Fashion are today working as captain of the industry and responsible for great success in the retail, textile mills sector, garment sector and logistic. We are proud for what the institute has done for the garment / retail industry in India.


Published on: 22/08/2011

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