Our vision is to become the vehicle for the elevation of the country, Leisure Club Pakistan
Leisure Club, locally-sourced and stitched western clothing for boys and girls of Pakistan was founded in 1997 by SEFAM Private Limited. BR Research met with Leisure Club's core team, senior brand manager - Omar Badi-uz-Zaman, and senior general manager - Omer Chaudry for a discussion over family businesses, apparel retail in Pakistan, and the group's history, successes and challenges.
For five years, Omar Badi-uz-Zaman has worked as a brand strategist, and is now the senior brand manager at Leisure Club and his pioneering vision has been the driving force in defining Leisure Club as a brand, featuring two premium sub-brands: Leisure Club and Leisure Club Kids. Omar holds a bachelor's degree in Arts from the University of British Colombia (UBC), Vancouver, Canada.
Omer Chaudry joined SEFAM Private Limited as the general manager around six years ago with a motto to develop and lead a charge and dynamic Pakistani team to take over the world. Before SEFAM, he served as the head of sales for Europe at Azgard Nine, and brand head for Levis Pakistan.
BR Research: Tell us about the family's history in the business?
Omar Zaman: Our business dates back to the time when my grandfather, J.A. Zaman started off Ali Embroidery Mills 43 years ago, which is still working today. This was the time when the market for machine embroidery on lose fabric was flourishing. However, that industry crashed completely in a very short span of time due to international competition, rising imports, etc. My father Hamid Zaman, who had been working with his father for at least five and had a developed a good knowledge of machines, fabric and the market. decided to get into the retail business. This was a challenge as there was no concept of retail chains in Pakistan as such 31 years ago, and he himself had no practical experience of the same.
After a couple of failures, he entered the industry he was more familiar with. Along with his siblings, he set up his own company SEFAM Private Limited in 1984 with retailing operations starting in 1985. The idea was to manufacture and retail high quality embroidered fabric made in Pakistan that could compete with the Japanese and other qualities of fabrics available in the market at that time. It has been a pioneer company in the concept of chain store marketing in textiles, and today it is the largest fashion house in Pakistan.
We started out with Bareeze brand, and have grown to 12 home brands today. In the last two years, we have added three international brands, getting the master franchisee rights for Armani, The Entertainer (toy shop), and Polo Ralph Lauren, taking the tally to 15 brands altogether.
We also have some partner companies in the family business that started along the way. A key one of them is Sarena Industries & Embroidery Mills (Pvt) Limited, a fabric processing plant established in 2001. It was started because my father was facing multiple challenges with respect to integrity and quality assurance for Bareeze - two qualities that the entire company is established on.
Today Sarena is a vertically integrated, export-oriented unit dealing in weaving, production, CMT, dyeing and finishing, supplying fabric to Europe, America, Middle East and Far East. Even though Sarena was initially established to facilitate SEFAM brands, the latter now only accounts for 13 - 17 percent of Sarena's overall business volumes.
BRR: What is your overall retail presence in Pakistan?
OZ: We are in excess of 430 points of sale. The brands that I am affiliated with are Leisure Club and it offshoots: The Working Woman and Shahnameh.
BRR: Tell us more about Leisure Club.
OZ: 19 years ago, Leisure Club established itself as the first ever branded retail chain for western apparel in Pakistan. It all came into being when a duo of enterprising siblings - with a touch of the same spirit that created Bareeze - observed that the world's best apparel brands were all too often tagged "Made in Pakistan" yet, strangely enough, there was no such premium clothing brand to be found anywhere in Pakistan. The perception was that brands are not for Pakistanis; that we did not value the concept of quality, would not pay a premium for it; and subsequently that anyone wanting to introduce one locally was doomed to failure. And so, anyone who did want quality, branded clothing, had to go abroad to get it. Those who could not afford to or did not have the time had to settle for sub-standard design & fabric quality. This is when Leisure Club was born. I was 9 years old when Leisure Club started. I remember being in the very first photo shoot we had. I along with the help of professionals such as Leisure Club's Senior General Manager Omer Chaudry are trying to carry forward my father and company's vision of taking this brand from being a local institution, to a global player that Pakistanis anywhere in the world would associate with proudly.
BRR: Where does Leisure Club stand as of now in terms of growth?
Omer Chaudry: Right now in Pakistan, Leisure Club is in the consolidation stage; we grew to a substantial size, and then we started consolidating in a lot of ways to rectify a few mistakes we made over time. However, Leisure Club 2016 onwards will be worth looking at.
And we at Leisure Club are playing our role by building a Pakistani brand - creating its positive identity when we go abroad. We feel that it's like giving humanity another chance, because we are talking about a couple of million people who have been tagged red. What Sony and Toyota did for Japan, what H&M did for Sweden, and what ZARA did for Spain, Leisure Club will do that for Pakistan. Our vision is to become the vehicle for the elevation of the country like all big brands across the world.
BRR: Corporate governance issues for family-owned businesses are immense; do you have a plan in place for dealing with them?
OZ: Besides officially being the senior brand manager of the three bands, my family designation is managing trustee. I, as senior brand manager report to the general manager, who is a non-family member in the business. So basically, all family members are not only managing trustees, but they also have professional designations. This goes on to show that most of our company is professionalized with CEO and COO being non-family members.
More than 80 percent of the businesses worldwide are family businesses. Like most family businesses in Pakistan we face similar challenges. But we have structures in place, and we are in the process of finalising a succession plan; we do have a board of directors with six members that functions and meets regularly. And while the ownership is the same, we have separated the playing grounds at various levels so that the management is easier and professional.
BRR: How many employees do you have across the group?
OC: As a group, it is in excess of 6000. Roughly, 10 percent of this would be part of the management.
BRR: How does our fashion retail fare internationally?
OC: Like any other industry, the fashion industry has its own ecological system; it provides employment; it engages many people; it has its own set of opportunities and problems.
Going back in time, Pakistan was known either for its agriculture or textile industry. While the textile industry started fading away, the fashion industry continued to blossom because what we have here is a great number of fantastic consumers who are as demanding as any international consumer. They are as 'global' as any other consumer in the world with demands, needs and aspirations almost the same if not more. When you look at fashion trends and cycles, we are there at the forefront with a lot of local brands going out of Pakistan. You see many brands going international, which means they had the potential.
Even ourselves with Leisure Club, we took on Amsterdam Fashion Week twice. We have participated in Indian Expo twice (Delhi & Mumbai) and Australian Expo. SEFAM became international in 1995 with the setup of a Dubai based company, Sehas LLC to run retailing operations in Dubai, Sharjah and Abu Dhabi as well as rest of the Gulf area
BRR: How difficult is it to establish a brand aboard?
OZ: In my view, there are a couple of factors that hold back Pakistani western wear brands from establishing themselves abroad. One is vision; brands need to have a global vision to become a global player, and here the focus of many brands has been limited to local needs and market.
The second factor I believe is the lack of innovation in design; why is it that global brands source their production from Pakistan and sell worldwide, whereas Pakistani brands are unable to do so? You need a certain commitment for innovation in design.
BRR: Instead of creating a western brand for a western market that has a deluge of existing well-established players, why don't you create a market for what you really are back home?
OZ: I think that is definitely an opportunity, but we won't limit ourselves to just the eastern side having potential. The mantra of our brand Leisure Club is 'Made of Pakistan'. We are continuously struggling to capture and discover for ourselves the true identity of Pakistan, and I have come to an assessment so far (and not a conclusion yet) that given Pakistan's history, the western wear is as much 'Pakistani' as eastern wear while not being indigenous. In near future you will see a brand out of Pakistan, hopefully Leisure Club that will compete in the international market on an international platform.
BRR: what is the modus operandi of your retail outlets?
OZ: A chunk of them are own-and operate, while some are franchised. Franchising business especially in eatery and apparel has become very competitive. So we take serious franchisees on board who know what they are getting into and can offer something to the brand e.g. build equity in a particular geographic area. As for outlets themselves, there are always some outlets that are there to build equity, while others are required to build revenues.
Right now, there is an overflow of brands, but very soon it will be realised that all the brands are not feasible with skyrocketing rentals and this bubble will burst. A good rule of thumb is that the rent of your outlet should be below 20 percent of your revenues.
BRR: Do you believe in catering to the society?
OZ: Absolutely. The reason we do business is because we feel business is the best vehicle for bringing about positive social change. Made of Pakistan is our mantra and we stick by it.
Some of Leisure Club most innovative alliances and socially conscious campaigns have been 'Vote for Pakistan' initiative, which was recognised by the Election Commission of Pakistan as their official video for the 2013 National Elections along with Leisure Club's ongoing social entrepreneurship project, "Clothing A Million Smiles", where Leisure Club aims to collect a million articles of used clothing from its customers, to sanitise, package and distribute them to those that truly need them. For this we have partnered with over 10 NGOs.
Other than handing over to partner organisations for direct distribution to the deserving, one of our long term goals with 'Clothing A Million Smiles' is to amalgamate the generous spirit and the entrepreneurial genius of Pakistani people and channelise it to create a self-sustaining and sustainable business model. We believe that at the heart of such socially driven/conscious campaigns is the philosophy that an ethically run and socially aligned business is the best vehicle for change in society.
I would like to conclude by saying that we all the ambassadors of Pakistan; we need to stop looking at the bleakness in our circumstances and look at the uniqueness of our opportunities, and believe me, they are immense. Pakistan Zindabaad!
