If proof was needed of ?the internet’s power ?in influencing retailers’ decisions, then Pakistani store chain Khaadi?is a classic example. ?The clothing and textile manufacturer knew that now was the right time to expand into the UK because of its Facebook page: of its 600,000 followers on ?the social media site, 64,000 are from the UK.
Add to that five dedicated UK websites selling Khaadi’s products online, requests to be franchisees – which the company does not ?do – and “a little in-house research” was enough to convince chief executive Rehan Syed that his goods would sell here. So, ?every click brought the retailer, which specialises in handwoven and embroidered garments, closer to this country.
And Khaadi, which has stores in Pakistan, the UAE and Malaysia, is heading for ?the UK’s two highest-profile retail locations: Westfield London and Westfield Stratford, where?it plans to open in early December.
Choosing the Australian mall developer was an easy decision, says Rehan. “With Westfield we cover both east and west [of London] in terms of positioning and, of course, Westfield London is the biggest mall in Europe.”
The units are small – 2,000 sq ft ?– but prime. “It’s the perfect size for international expansion,” says Syed. They sit on the main thoroughfares, next to big-name retailers such as Marks ?& Spencer, LK Bennett and Nine West. Westfield has a number of five-year ?lease breaks coming up as it celebrates the anniversary of the opening of Westfield London in October 2008?(see feature on page 10).
Not only is Khaadi targeting prominent UK shopping centres, but it is also eyeing the capital’s iconic streets of Oxford, Bond and Regent, as well as Covent Garden and King’s Road. Regional shopping centres are also on its?shopping list. Syed says Khaadi’s optimum number of UK stores is 20.
Sam Foyle, director of retail for Savills and Khaadi’s acting agent, says: “We are considering everything at this point.”
Foyle confirms that Khaadi is in talks with other landlords. “We have already been looking at a few opportunities in some of the biggest schemes in the other big metropolitan cities,” he says. “It’s ?not about sitting back and seeing how [Khaadi] are doing before committing to further stores, as discussions are now taking place on other locations. It’s going to be an organic roll-out.”
Syed adds: “This is all about the location. We can’t say we will do it in ?two years. There’s no rush; it has to ?be the right size and type of unit.”
Although the Khaadi range includes women’s, men’s and children’s wear and home textiles, only the women’s range?is being brought to the UK – for now. “Women spend more money on fashion,” says Syed. “They want to check new things and we have a much bigger variety in women’s fashion, whereas men’s is more limited.”
However, the retailer does have plans to bring the rest of its range to the UK. “We would be looking for a much bigger flagship store where we would put the home and fashion under the one roof,” says Sayed. “Eventually, we want to bring the home concept before we bring the kids’ wear, but we will start with women’s fashion. We aim at the 25 to 45-year-old affluent shoppers, with a price point similar to Banana Republic.
“In terms of the home textiles, I think there’s a huge gap in the market. Here there are products that are really cheap or really expensive, but there’s nothing?in the middle.”
Throughout the conversation, Syed ?is at pains to emphasise how Khaadi’s products differ from those of many other fashion retailers. “All our products have something to do with being handmade, so it’s either hand-printed or hand-woven,” he says. “We guarantee garments for life, and we guarantee?they will not bleed or lose their shape.”
At Khaadi’s original store in Karachi (see panel below), employees would weave for 12 months and sell products for two months. The company now has ?20 stores in Pakistan, seven in the UAE – where its international expansion began in 2010 – and one in Malaysia.
“We started in the UAE because of its close proximity [to Pakistan],” says Syed. “It was a great learning experience being in the international market, and now we are ready for a more competitive market. I think London is a more competitive market than Dubai, with more brands present here. At the same time, the consumer here is more willing to experiment with new brands, whereas in Dubai they have fixed brands that they go to and the brand following is very loyal.”
As well as Khaadi’s plans to grow in the UK, Canada and the US are also on the radar, and the company is set to ?open in Turkey. But Asia will be the?main target for its expansion.
“We have already committed to ?a store in Turkey – the mall is still ?under construction, and will open in ?early 2015,” says Syed. “The next stop ?is Canada and the US. And we have just signed in Kuala Lumpur. But the biggest focus is on Asia, with its population of ?320m. It’s all a numbers game.”
Syed adds: “We have a hub-and-spoke model, so we initially thought we would make Singapore a hub for our Asia business, but now Malaysia is more competitive than Singapore, so we are trying to set up something in Malaysia. We have already signed up with the best store in Malaysia, the Pavilion Mall, and we are taking possession on 1 October.”
Funding this growth is not a problem, says Syed. “It’s a function of cash flow. The company is not leveraged. Our group has zero debt on the balance sheet.”
As the power of the internet, and Khaadi’s reaction to it, has shown, retailers are prepared to listen to what customers want. And a comforting aspect for bricks-and-mortar stores ?is that shopping on the web is actually encouraging retailers to open physical shops. So all the sector can hope for is that customers keep on clicking.
Khaadi history
Khaadi was established in Karachi, Pakistan in 1998 with a philosophy to revive the dying art of hand-weaving. But it wasn’t easy, says chief executive Rehan Syed. “The weavers had gone?to be security guards or gardeners or other jobs, so we had to actually look for them to see if they would be willing to come back to weave some garments for us.”
Today Khaadi, which means ‘hand woven’ has 2,000 hand looms in its factory. “A hand loom is very cheap equipment, and we can put in a lot of them, but we don’t have weavers, so in our factories we have a training programme to train new weavers. We have a separate section for the older weavers, who can work at their own pace. We don’t put pressure on them.”
Khaadi ranges
• Khaadi Pret – men’s and women’s fashion
• Khaadi Khaas
• Khaadi Kids
• Khaadi Home
noella.piokivlehan@estatesgazette.com
