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Profit waltzes in high-end shoes

business Updated: Apr 17, 2009 21:16 IST
Pawan Sharma

His factories are humming with activity; his sales force is buzzing with ideas; he is logging thousands of international air miles every month. His accountants are busy counting the cash.

Indereshwar Singh Paul, 58, managing director of Drish Shoes, an export firm he started 19 years ago, has beaten the recession by taking the contrarian route. He has jumped in to make high-end shoes at low costs, and in the process, has even acquired two century-old high-street fashion brands in Germany, Manz and Fortuna, for unspecified prices.

Paul’s three main production locations – a tannery in Jalandhar in Punjab, a leather finishing and shoe and accessory unit in Nalagarh in Himachal Pradesh and a shoe production unit in Panchkula, Haryana – are working overtime to meet deadlines. And Drish Shoes, which he started in 1990 with Rs 1.80 lakh, has set a target of expanding its 2008-09 sales of Rs 115 crore by 30 per cent.

But less than a year ago, in July last year, the picture was not so rosy. “Our clients abroad were not lifting ready consignments. We were operating at less than 50 per cent capacity, and the future looked bleak,” said Paul, who has studied at a Swiss business school. The global slowdown – recession still hadn’t set in then – it seemed, would claim yet another
Indian exporter as victim.

Paul went against the grain. “I decided that I would not lay off any of the 1,700 people I employed,” he said. Drish also decided to move up the value chain. And Paul was determined to do so without increasing prices.

He approached Zara and Kickers, two leading European brands of high-end shoes with a compelling offer they couldn’t refuse – he would supply them with high-end shoes at a price that was 40 per cent lower than what their Portugese and Spanish suppliers were offering.

India was not known as a supplier of high-end shoes – Zara and Kickers bought only low-quality products from Indian suppliers – and, in normal times, his approach would probably have been rebuffed. But these were not normal times. Both Zara and Kickers agreed – and Drish was back in business.

“We got large orders… Drish sold over three lakh pairs between October and April to these two brands. Now, we have orders to manufacture five lakh pairs of shoes over the next six months, resulting in 66 per cent increase in production,” said Paul.

Paul decided to ride his luck. His back end, producing high quality shoes at a reasonable cost, was in place. Why not buy a well-known brand in Europe and establish himself at the front end – facing the customer – as well?

It was an audacious plan, and the chances of failure were quite high. “You don’t get a second chance to jump over a chasm. Either you cross it or you fall. I took a risk – and succeeded,” said Paul.