John BissellThe fables of the founder of Fabindia! Published On: Saturday, October 10, 2015 Views 23252
A lesser known name – John Bissell is the proud founder of Fabindia – a chain of retail stores selling garments, furnishings, fabrics and ethnic products, which are handmade by craftspeople across rural India.
With over Rs.1500 Crores valuation, along with 90,000+ artisans and craftspeople and roughly 200 stores across India and abroad, Fabindia today is widely known to be and has successfully managed to boost rural employment across villages in India.
Due to such a unique business model, the craft-conscious enterprise concept of Fabindia has also become a Harvard Business School case study.
Since the demise of John in 1998, the reigns of the company has been managed by his son William Bissell.
On the completion of 50 years of the foundation of Fabindia, they have also released a book depicting the journey of Fabindia called – “The Fabric of Our Lives: The Story of Fabindia”, written by Radhika Singh.
Today, apart from his wife Bimla Nanda, John is survived by a son and daughter, William and Monsoon.
A Journey to India!
Originally, John belonged to Hartford, where his grandfather served as the President of the Hartford Fire & Life Insurance Company. John completed his education from the Brooks School in North Andover and then Yale.
Since his childhood, John grew up listening to the stories from his father about India during the World War II. And thus grew his love for India as well.
After completing college, John began working for Macy’s, New York as a buyer, and at the same time also developed a sense of liking for the look and feel of hand-woven fabrics.
These two interest of his came to life when, in 1958, John was given a two-year grant from the Ford Foundation to guide and advise the Government of India run Central Cottage Industries Corporation in making goods for export.
He strongly believed that the Indian textile industry had immense potential to grow big and wanted to help Indian handloom textiles with a way to provide employment to traditional artisans.
During this phase, he met Bimla Nanda, who was serving the then United States Ambassadors to India – Chester A. Bowles and John Kenneth Galbraith, as their Social Secretary.
After his grant expired, John decided to get married to Bimla and stay back India. And hence began a new chapter in his life!
The Fables of Fabindia!
Now during his stay in India, what he noticed was that, the village-based industries were one of the sectors which held an overabundance of skills, but yet were untapped and hidden from the world.
The Early Days…
He was completely determined that the Indian handloom textiles were a super success and all they required was a platform. That is when he decided to do something about it, at the same time capitalise on the golden opportunity, and thus established Fabindia in 1960.
He had used his deceased grandmother’s $20,000 legacy as the start-up capital to form the company. It used to be based in two small rooms adjoining his bedroom in his Golf Links flat. It had also been incorporated in Canton, Connecticut, as “Fabindia Inc“.
His aim while forming the company was to provide fair and impartial employment to these craftsmen and traditional artisans, along with combining the best aspects of East/West collaboration.
So What Exactly Was Fabindia?
Now initially, Fabindia had started as just a one-man export company of home furnishings, by John. His idea back in those days was to provide the world with the beautiful crafts from India.
During his early years, John went on to travel across India, more specifically, craft-based villages and towns, to meet and find weavers and entrepreneurs, who could produce flat weaves, pale colours and precise weights in handloom yardage. After searching for a long time, he finally narrowed down to his perfect match and got A. S. Khera, a dhurrie and home furnishing manufacturer in Panipat, as their supplier.
In 1964, John happened to meet the British designer Terence Conran, who had recently established a Home Furnishing Retail Company called Habitat.
One thing led to another and soon, Habitat became one of their biggest customers. While at it, John also went on to establish a distribution network in the United States, supplying their products to mom-and-pop stores.
And by 1965 the company was clocking a turnover of more than Rs. 20 lakhs, and had also moved from his house, into a proper office.
The Hurdles & The Opportunities…
Now as time passed, a lot of transformations were brought about in the company as well. The company also had to go through an equal amount of problems, which they successfully managed to turn around into an opportunity to grow bigger.
During the peak of the Emergency Period enforced by the then Prime Minister Indira Gandhi in 1975-76, new rules were laid down by the govt. As per the guidelines, all the commercial establishments were strictly banned from running their business at residential properties, due to which Fabindia was forced to move out and from their second premises, a house on the Mathura Road.
But this turned out to become a boon than a curse. John used this problem as an opportunity and opened their first Fabindia Retail store to sell their products in New Delhi, and also used it as their register office.
With this move, they had also began catering to the urban India as well, and to stand apart from other government-owned and subsidized players in hand loom fabrics and apparel sector; Fabindia decided to adapt their own fabrics and designs according to the urban taste.
To do so, the designers were asked to modernize their line of home linens, and to add to that, they also introduced a range of ready-to-wear garments which included churidar-kurta suits for women, men’s shirts etc.
But this did not mean that, they let the village-based artisans or craftsmen, as a matter of fact, till date the company’s team of designers provide most of the designs and colors that are executed by these village-based artisans only.
And this resulted in the traditional apparel and products section becoming mainstream and trendy. It also was quickly picked up and adapted by the growing middle class and had began to get identified as the brand for the elite and intellectual, at the same time was affordable ethnic.
Now this was also the time when, Reserve Bank of India had instructed all the foreign companies to limit their foreign equity to 40%, hence Fabindia took a fab decision and did a major equity restructuring in the company by offering its shares to close family members, associates, and suppliers.
Since then there was no stopping to them, the company began to get great business through their exports as well as the store. Over the period of time the company also opened multiple stores as well.
But the company again was hit by another problem, when one of its biggest customers UK-based Habitat decided to part ways in 1992. That was because Habitat got acquired by the famous Ikano group, founder of Ikea, who then had decided to appoint its own buying agent in India.
Just when they were getting over that fact, John suffered with a Heart attack in 1993.
Looking at John’s situation and condition his son William was asked to join the company.
Till before then William, who is an Undergrad and a major in philosophy, political science and government from the Wesleyan University, was working with rural artisans and crafts co-operatives across Rajasthan, and was also an integral part in setting up of various weaver’s cooperatives. He had also spent several years in Jodhpur, after completing his education in 1988.
He gradually began to work and take care of the company under the guidance of his father till 1998, when the sad day arrived. John Bissell at the age of 66 passed away, leaving behind a legacy and his wisdom.
And since then, William took complete control of the Business!
This was the time the when the business was in profits and was clocking a turnover of Rs.12 crores.
Now for John Fabindia was a hobby, but William was no nonsense man and this was serious business for him, period. One of first tasks that William took as the CEO was to shift the focus of the company to the domestic market and gradually become a retail chain. Till then the company only had two stores in Delhi and was mainly dependant on the exports.
Since then there has been no looking back for the company. In the next two decades the company has brought about some major transformations, to not only surpass their exports business but also become what they are today.
Between 2000 and 2006; Fabindia added their first non-textile range of products from the fields of organic foods which was followed by personal care products and then later Handcrafted jewellery as well.
They also began a wide range retail expansion into the multiple and larger stores in metros like Mumbai, Chennai and Delhi, and otherwise as well.
This also boosted their revenues from Rs.89 crores in 2004-05 to Rs. 129 crores in 2005-06, which then reached Rs.200 crore in 2007. They also expanded their team of artisans and craftsmen to 22,000 spread across 21 states.
William noticed that the village-based artisans were getting barely 5% of the tag price of their products, and the rest used be taken away by the middlemen. Hence, “Like Father, like Son”, he decide to do the noble deed and introduced an artisan-shareholder system through “supply-region companies” incorporated as subsidiaries.
Fabindia calls it ‘Inclusive Capitalism’! In this system, artisans purchase shares in its regional companies for a minimal amount of $8 and receive a portion of the profits. The shares can then be used as collateral for loans.
This model has done wonders, and today, there are 18 such companies around the country, with more than 40,000 rural shareholders. In this model, the Artisans own 26% of the shares, while Micro Finance – a Fabindia subsidiary, owns 49%, and the rest is owned by employees and private investors.
Moving on, to fund his ambitious goals of expansions, William took help from his family’s old connections and sold 6% of stake of the company for an estimated $11 million to Wolfensohn Capital Partners (a private equity firm founded by former World Bank President James Wolfensohn), in 2007.
In 2009, the company also acquired a 25% stake in a UK-based £30 million ethnic women’s wear retailer called – EAST.
Later in 2012, Premji Invest, an investment fund owned by Azim Premji – Chairman of Wipro’s, took a 7% stake in Fabindia for ₹100-125 crores at a valuation of more than ₹1,500 crores. Additionally, L Capital, the private equity arm of LVMH, also acquired an 8% stake in Fabindia from Wolfensohn Capital Partners.
In 2013, Fabindia expanded further by purchasing a 40% stake in the Lucknow-based Organic Food and Supplements Company called India Organic.
And last year, with an idea to cater to the modern youth of India and the international buyers, the company has launched their western wear brand called ‘Fabels’. The brand which was first launched at their Connaught Place store in Delhi has been made available all over the country.
Today the company runs 196 retail stores across India, 2 stores in Singapore and 1 store each in Bhutan, Dubai, Italy, Nepal, Malaysia and Mauritius. Other than that, Fabindia also exports to more than 33 countries worldwide, mainly to wholesalers and retailers.
Additionally, the company also has a dedicated team of professionals to handle product customization and interior consulting for heritage hotels, resorts and corporate houses too!
What also makes them stand out in the crowd is the fact that, Fabindia does not advertise, and largely works on word-of-mouth publicity.
And lastly, keeping the noble deeds alive, William and John Bissell have also established “The Fabindia School” in Rajasthan. It is a co-educational, senior secondary school with more than 600 students including 40% girls. The school also subsidizes the tuition fees of the girl students and offers them scholarships, which is in partnership with “The John Bissell Scholars Fund”.
- Awarded with ‘Outstanding Achievement in Promotion of Cotton by a Brand’ by Cotton Council of India (2011)
- Awarded as the “Best Retail Brand” by The Economic Times (2011)
- Rated amongst “India’s Best Companies to Work for” by Economic Times and Great Places to Work (2011)
- Awarded with “TIE Retail Innovation Award” for ‘Excellence in Supply Chain Management’ (2010)
- Awarded as the “Best Retail Brand” by The Economic Times (2004)