How Varsha Bhawnani turned Vinegar Exports into Rs 12-cr brand
Posted by MydeaMedia
Does a six-figure salary guarantee a satisfying career? Not for me. In fact, I found my job with a private equity firm to be so mundane that I quit within a year. I had found employment with the Chatterjee Group Real Estate in Mumbai through campus placement at the Indian School of Business in 2004. After quitting, I wanted to explore my creative side through the start-up route, but wasn't interested in a large, capital-intensive set-up.
After toying with several business ideas, I finally zeroed in on fashion. I was aesthetically inclined and was good at styling and designing, which, I thought, would prove beneficial. My research in the field revealed a glaring need for an Indian export house that understood fashion. So, instead of sketching designs, I found myself drafting blueprints or business plans to start my own export house.
I finally launched Vinegar Exports in August 2005 from Bandra in Mumbai. Armed with a seed capital of Rs 4-5 lakh, most of which came from my salary bonus and Rs 2 lakh from my family, I bought five sewing machines and hired seven people.
At the same time, I had started attending the bi-annual International Garment Trade Fair in Delhi to understand the international markets. It was the perfect platform to showcase my ability and I took along sample designs for display in July 2005, but I didn't get the response I had expected.
For the first six months, I struggled to get clients. I got my first big client, a boutique in Spain, in December 2005, which helped me earn Rs 7,000.
It was a good development, but the first year of operations shook me up. I realised the importance of fighting for a Rs 10 margin on a garment-I almost went bankrupt trying to save minuscule margins on bulk orders since I knew nothing about manufacturing.
My learning process, whether it involved taxes or how middlemen ate into profit margins, began when I started handling bulk orders. My family wasn't interested in what I was doing and the only encouragement I got was from my buyers, who believed in my talent despite the fact that I did not have a factory. My revenue for the first year was about Rs 50 lakh.
By 2007, the exports had touched 50,000 pieces a month and I figured that it was time to consider expansion. So two-and-a-half years into the business, I rented a small factory at Mahim, Mumbai, and increased the number of machines to 30.
I also hired around 100 people, including an accountant, skilled workers, designers and masters.
Although I had started servicing bulk orders from brands like Esprit and Zaguar, I failed to strike a deal with the biggies since my small factory wasn't compliant in terms of workforce and infrastructure that such brands require.
After another year, I managed to scale up to 100 machines and hired six freelance designers. By this time, I was exporting garments to the US, Spain, Russia and Dominican Republic. I broke even in 2008, when my turnover touched Rs 6 crore.
Four months ago, we closed down the flagship stores since I now want to create exclusive couture and pret lines for high-end clients. I am planning to launch Vinegar as a label in India and have registered it as a brand in Spain and Argentina.
The export house is still going great guns, producing 25,000 pieces a month and selling at a 40% margin. In 2009, we rented another 80-machine factory at Goregaon in Mumbai. Today, we make clothes for brands like Mango and Top Shop, and also design uniforms for Air India SAKS and Grand Hyatt group of hotels in India. I have already received confirmed bulk orders from international buyers worth Rs 12 crore.
Meanwhile, I have forayed into image and wardrobe consultancy, tying up with hair stylists, designers, make-up artistes, fitness trainers and dentists under a new couture label, Varsha Bhawnani, to help clients revamp their look or refresh their wardrobe. The charges start at Rs 25,000 and vary according to the client's budget.
I've learnt that it is better to follow your passion than to work only for money. If there is passion, money will follow.