Why I went to Mumbai to make my fortune
Nervous about the state of British business? Head to India, advises retail boss Oliver Kaye. Having completed stints at Marks & Spencer, Tesco and Arcadia, Mr Kaye, 32, recently moved from North London to India to head up Calvin Klein because — as far as he is concerned — the British retail market is at a standstill.
“Retail in the UK is boring and bland. It’s at complete saturation,” says Mr Kaye. “If you look at what’s going on in the high street, it looks like it’s going to hit a recession.”
According to the Confederation of British Industry, last month, British retailers suffered their worst period in two years, and figures released by the Office for National Statistics (ONS) showed that the volume of retail sales fell by their fastest rate in more than a year, slumping by 0.4 per cent from February to March.
Oliver Kaye in Mumbair, from where he heads Calvin Klein's operations in India
“Everybody is having a very tough time. Virtually every high street store, apart from Tesco, Primark and Zara to a certain degree, is downscaling. There are loads of redundancies about to happen.” In India, he says, it is the reverse. “India is about 15 years away from being saturated,” says Mr Kaye, who moved last December and encourages anyone struggling in the current economic market to do the same.
He tells JC Business: “If you look at the big UK companies, such as Sir Philip Green’s Arcadia, they are expanding [internationally] big time. In terms of profit, opening more stores and increasing turnover, you have to look at where else can you get the money — and it basically has to come from either China or India.
“It’s exploding over here at the moment. It’s just go go go.” He notes: “Everything in UK retail is about cost cutting. It’s a very kind of “we’ve done that before” attitude. In India, it’s a can-do attitude. Everything is so new. It’s positive. It’s about trying things for the fist time. You are dealing with a real chalk and cheese difference.”
According to Mr Kaye, no one in India had heard of a designer brand until three years ago, when Louis Vuitton opened. Gucci and Jimmy Choo have since set up operations there, with Dolce & Gabbana and Armani due to open in the next six months. Marks & Spencer has also reportedly agreed to open 50 stores there in the next few years.
But Mr Kaye has his own target. He plans to open 50 Calvin Klein stores in the next two years. How much does it cost to do so, compared to the UK? “It would cost around £100,000 to refit a store in India — half of what it would cost in the UK. In terms of managing it, it would cost around 30 per cent less than in the UK, primarily because of the wage-cost difference.”
Mr Kaye moved to Mumbai after more than a decade working for some of the UK’s top fashion retail brands. Opting not go to University, he started his career in 1995, aged 19, on Marks & Spencer’s management training programme. “Going to university was the obvious thing to do but I knew I wanted to go into retail. My family are in retail.”
On completing the training programme, Mr Kaye got his first big break, following what he describes as an over-the-top presentation he gave to Lord Andrew Stone [managing director of M&S at the time]. He was subsequently appointed head merchandiser for men’s suits at the age of 21. In 2001, when M&S was making cutbacks, he moved to Tesco as regional manager, running 20 hypermarkets. But missing fashion, he joined Selfridge’s to run their $400 million women’s wear business. Next up: Miss Selfridge — part of Sir Philip’s Arcadia group — where Mr Kaye managed close to 100 stores across the UK, before being headhunted for his current job.
“I could see what was going on,” he recalls. “The sub-prime issue had just started and it was pretty obvious what was going to happen.
“I thought there is no point staying in the UK and the opportunity to head up Calvin Klein was too good to pass up.” He notes: “I’ve got friends in Goldman Sachs, JP Morgan, all that kind of stuff, who are struggling at the moment. I’ve got a friend who’s a very senior head-hunter, who is finding things very, very tough and I have a lot of friends in retail who are all nervous. Most of them, in fairness, are just keeping their heads down.”
But surely London is still the financial capital of the world, with more opportunities than in India? “There are 1.1 billion people in India, compared to 65 million in the UK,” he says, pointing out that in India there are more millionaires and more 30-year-olds with disposable income than anywhere else in the world.
“There are pockets of wealth, such as in Mumbai, Delhi and Bangalore, where you could easily be in London. All the big boys are over here; PWC, Accenture, and every five minutes, there’s another one coming. There’s a Porsche garage here that is taking more orders than anywhere else in the world at the moment. It just shows you how much money is here and how much India is moving forward.”
Mr Kaye, now on a good six-figure salary as he puts it, insists now is the optimum time to do business in India. “The Indian consumer is just about beginning to understand what an international brand is. They [the consumer in India] so want the luxury goods market now. Wealthy Indians have so much disposable income. They want to become Western to a certain degree. Ten years ago, there was no McDonald’s or Coca Cola. Now they are everywhere. It’s natural progression of a country.
“The impressions we have of Indians in the UK is so different to what they are like,” adds Mr Kaye, who regularly attends a Lubavitch service at his local synagogue. “I have never worked with such nice people. They are the most hospitable. They will never allow you to be on your own for more than two minutes.”
The cost of living, compared to the UK, also has its advantages. “Everything costs like 20 or 30 pence. A really good meal with wine will cost no more than £10 or £12. A two-hour taxi journey costs £2.50 and a half-hour train journey costs 7 pence.
But does the former Finchley-local not miss London? “I keep in contact with people via Skype and Facebook. My family and friends think it’s such a brilliant opportunity. They are pleased I’m here.”