24 | FORBES ASIA MAY 2018
steering the group’s green agenda. Arvind is managing 65,000
acres of farmland under the Better Cotton Initiative, a global
NGO promoting judicious use of water and approved chemi-
cals. “By doing business the right way you are creating models
of sustainability and development that can protect the things
you love,” says Punit.
A slew of in-house innovations are already afoot: dyeing
without water, clothing from recycled waste and using man-
made i bers in blends.
Meanwhile, Kulin, 32, who’s the face of the company in
Indian business media, is looking to parlay a portfolio of
brands—including international labels like Tommy Hili ger
and U.S. Polo Association—into a $1.4 billion outi t over the
next few years. h e business has been growing at a compound-
ed 25% over i ve years.
India is under-penetrated by brands, and the overall market
for branded clothing is expected to double by 2021 from $15
billion in 2015. “We expect at least i ve brands to hit the 1,000
crore rupees [ $154 million] mark by 2022,” he says.
h is growth potential has attracted the attention of a
marquee investor, the India-focused fund Multiples, which in-
vested $110 million in October 2016. “Arvind has an aggrega-
tion of brands at price points across the income pyramid,” says
Renuka Ramnath, Multiples’ celebrated founder. “h ey cater to
a very large addressable market across casual, denim, formal,
teen, kids, innerwear and other segments—all this gives them
a huge runway for growth. h e platform can attract consumers
early and keep them buying for several years.”
h e younger scion has also set up an e-commerce play.
“h e world of tomorrow is very dif erent,” says Kulin, who has
an undergrad degree in electrical engineering from Stanford
and an M.B.A. from Harvard. “We can use machine learning
to i gure out customer preferences and show products based
on those preferences—not only online but in the store as well.h at way you aren’t hitting everyone with the same bullet but
you are targeting your customer in a hyperpersonalized way.”
h e brothers are building on a legacy that dates back to
1897 when Lalbhai Dalpatbhai set up Saraspur Manufacturing.
His son, Kasturbhai Lalbhai—the current chairman’s grand-
father—established seven textile mills for his seven children.
Sanjay Lalbhai, representing the fourth generation, joined the
business in 1979 and was assigned to materials management.
“h at hardly took one hour of my time,” he says.
So he teamed up with friends and tried assorted product lines.
Some did well, some bombed. “I must have tried a hundred [busi-
nesses],” he laughs. “I wanted to create something.” Eventually that
led to denim and near-disaster along the way (see box).
h e three Lalbhais work together and live under the same
roof. While Kulin travels much of the month—the brands
business operates out of Bangalore—he gives daily updates to
his dad and brother. h e sons are encouraged to speak their
minds, but when there’s a dif erence of opinion, Lalbhai senior
makes the call.
h e family members also work closely with a team of man-
agers. “h e two sons work seamlessly without confusing the
role of the professionals,” says Multiples’ Ramnath. “Nothing is
taken as legacy. Nothing is taken for granted.”
Dad shares dif erent interests with each son. It’s i tness and
electronics with Kulin, and with Punit it’s gardening and heart-
fulness (a meditative process for increasing inner awareness).
Father and son devote a good hour to this practice every day.
Papa Lalbhai is also involved with all of the group’s forward
strategies—be it the internet business or the omni-channel
retail push. “I’d rather make a mistake of being too much in the
future than be glued to the past,” he says.
As Punit adds: “If there is a generation gap or a mindset
dissonance, it’s the next gen trying to catch up with previous
gen. We have to run to catch up with him.”FORBES ASIA
THE LALBHAIS
DENIM AND DISASTER
In the 1980s the family’s mills took a hit because of the onset of power looms. Four
of the seven mills went under and two were merged into Sanjay Lalbhai’s remaining
(Arvind) mill. The patriarch survived—by bringing denim to the country. Arvind Ltd.
is still one of the largest denim manufacturers in the world, supplying the likes of Levi
Strauss and GAP. Lalbhai also stayed ahead of his peers, hiring people from consumer
major Unilever in the 1980s and engaging consulting fi rm McKinsey in the 1990s. “We
brought in so many people from Unilever that the chairman called me and asked me not
to poach,” he says.
All went well until a debilitating crisis in 1998. While setting up a 450-acre plant,
he was plagued by delays and simultaneously faced a drop in denim demand. Debt
mounted to $683 million. “Everything that could go wrong went wrong,” he says. But
he convinced 80 creditors that he had a viable business and even sold assets to bring in
new money. But it took nearly four years to pull the company out of the abyss—in time to
provide a Western education for the two sons.
From that low, he’s now careful about ensuring cash fl ows. The patriarch oversees strategy and innovation at the group level, and
he’s in regular touch with at least 40 key people across the group—including his sons, even if they’re needed while vacationing. “I
always need to know what could go wrong,” says Lalbhai. —A.R.
LONG STRETCHPER CAPITA CONSUMPTION OF APPARELINDIA’S HOME MARKET FOR
CLOTHING HAS FAR TO GO.(^1) PROJECTED.
SOURCES: IMF; WAZIR; CLSA; FICCI.
2015 20251
INDIA $45 $123
CHINA 172 435
U.S. 97 1,116
F