FT Special

The story of how Raymond rose from the bottom to the top of the apparel businesses

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Raymond, the most popular and classic fabric and fashion retailer of India, was incorporated in 1925 almost 92 years ago. It was envisioned by George M. Raymond and since then, imagination has been the spark behind every new challenge. Ranked at 23rd of the most trusted brands in India, it still maintains its legacy of providing high-quality suits and suit fabric all over the world with around 700 retail shops spread across India and overseas, in over 200 cities.

But the company today owes its credit to CEO Sanjay Behl and MD, Chairman Gautam Singhania.

Ms. Usha Suresh, CEO, KVIC, Mr. Vinai Kumar Saxena, Chairman, KVIC, Mr Gautam Hari Singhania, Chairman & MD, Raymond Ltd., Mr Sanjay Behl, CEO Raymond Ltd.
Ms. Usha Suresh, CEO, KVIC, Mr. Vinai Kumar Saxena, Chairman, KVIC, Mr Gautam Hari Singhania, Chairman & MD, Raymond Ltd., Mr Sanjay Behl, CEO Raymond Ltd.

Having a fascination for cars, Gautam Singhania took over in 2000 when he had lots of challenges to face and new risks to take, many of the businesses like cement, steel etc. were running simultaneously under huge debts affecting the major apparel business. He decided to sit back and ponder over each and every aspect wherein he got to know that all unrelated businesses had to be shut down and focus being shifted to textiles and apparel. All other business plants were sold to various other companies like cement plant was sold to Lafarge, synthetic business to Reliance Industries and much more. By clearing this, they raised around Rs. 155-1600 crores and cleared all debts, thus reinvesting the money. From then, the brand Raymond gained its glory back. Gautam Singhania proved to be a true blue blood to the family and business

But when in 2013, the textile conglomerate was having a tough time, the Chairman Gautam Singhania handed over the reins to present CEO Sanjay Behl in 2013. since then, the company has seen a huge turnover in the market with its old-gold reputation back and an increase in the percentage of shares. Behl was an unusual choice because he did not have a beforehand experience in textiles. He was a veteran at Reliance Communications and Hindustan Unilever I.e. having more knowledge of soaps, detergents and mobile phones. But what drove him to be the CEO of the 91-year-old empire was his understanding of the pulse of consumers.being associated with consumer-centric companies had made him get an insight of customer’s minds. “He had a reputation of getting things done”, quoted by Ravi Venkatesan, chairman of the advisory board of Raymond.

Sanjay Behl had lots of incomplete and pending work to do. Once a reigning brand, Raymond was struggling to compete with newer Indian brands and foreign competition. Operating margins had fallen by 5% since 2010. the day when Behl had joined Raymond, the stock tumbled 38.2% making the company lose Rs. 885 crore while the Sensex rose to 16.6%.

Gautam Singhania had made it clear to Behl to bring back the glory by 2020. since the time Behl has joined in as CEO, the stock has doubled out spacing the Sensex rise of 34%. Revenue has grown up by 37% and profit has been more than triple. Behl did what he knew of i.e. switching Raymond from a  product- centric division to a consumer- centric division as tailors were leaving the profession, making it hard to stitch expensive suiting fabric and cost of handling the business was soaring. Raymond shut down low- cost fabric brands while selling off fabrics like carpets, curtains etc. The number of under- working plants were closed and Behl had a full hand in doing so. AMajor change was of terminating about one-fifth of the workforce leading to 500 people being shown the door of the company because Behl wanted top management for his company.

Venkatesan says that Raymond glorified due to the chemistry between Behl and Singhania. As Behl got the control of full operations, he did what he felt was correct and in company’s favour and got full support from Singhania.

Raymond was back in the market with a bang. Making Raymond the top most brand in fine suiting and fabric and apparel is still a work in progress but it can be concluded that Raymond will continue to be a top contender in the market and its business will grow. With investors seeing value in the company, the company is doing great and both- Behl and Singhania are setting an inspiration of team-spirit, coordination and a free hand to do what you feel is good for the company.