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MY FAVOURITE BUISNESSMAN

MADE BY- MANISH.G.JHA

F.Y B.B.A ROLL NO. 17

SUBMITTED TO- PROF.VED PRIYANKANT

SUBMITTED ON- 12/08/2010

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TOPIC
MY FAVOURITE BUSINESSMAN

INDEX
1. INTRODUCTION
2. BIO-GRAPHY
3. HIS NEW IDEA
4. CHALLENGES
5. ACHIVEMENTS
6. FUTURE PLANS
7. BIBILIOGRAPHY

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MY FAVOURITE BUISNESSMAN

MR. JAY GUPTA

M.D OF THE MULTI-BRANDS


RETAIL CHAIN “THE LOOT”

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BIO-GRAPHY

Jay gupta was born in a very small


village known as Raxaul-briganj
which is situated near Bihar Nepal
border. His family occupation was
of food grains. His zest for
entrepreneurship was implanted by
his family.
Belonging to a small
business family, He had always
been looking up to his father and
seen his dealings and day-to-day
activities…that’s when the passion
of doing something unique on his
own developed. Apart
from this he has always
been independent and
the thought of service or
working under someone
never occurred to him.
Right from his younger days, he
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wanted to do something on his own
& create an organization.

HIS NEW IDEA

A Store by the name of “The


Loot” is fast being recognized
as the biggest thing to hit retail
therapy in India in a long time. Jay
Gupta is the man with the plan
behind “The Loot”. A second
generation entrepreneur, he has
already gained a foothold on the
hearts minds and pockets of
shoppers with his unique yet
simple concepts. In an interview
withYourstory dynamic

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entrepreneur Jay Gupta let us in on
the story behind “The Loot”.

HE started business in 1996 when


HE stumbled upon an article in a
magazine which selected – Chain of
Hotels, Banks and Retail as ever
growing profitable businesses. HE
opted for Retail, initially to get into
the garment and footwear business
by opening franchisees stores for
brands like Colour Plus, Adidas,
Nike, Weekender, Provogue,
Quickies coffee shop etc. but soon
realized that HE was not able to
give the BEST to the customers.
The customer wanted to buy
brands at an affordable price.

After a lot of pondering HE got into


the idea of giving the best brands
to the customer at the best prices
under one roof by setting up the
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1st ‘The Loot’ store in 2004. The
Loot can thus be considered as the
pioneer of multi branded discount
chains. The Loot was the only
multi-brand retail venture that
offered minimum 25% off –upto
60% all 365 days of the year on
guaranteed products and
prices. The concept was well
accepted & appreciated by both
the customers & business
associates.
Earlier they targeted only the youth
but today they are a family store
and target men, women and
children.
The target audience is quite
versatile and varies from upper,
upper middle class or middle class.
They are targeting a mass
audience. THEY have changed the
shopping habits of people and
made big brands affordable to
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everybody.

The loot snapshot


Company name The loot
Founded in 2004
Head quarter in Mumbai
Company web site www.lootstore.com
industry Retail consumer
based
Stage of the Scaling up
company
Source of idea Discovered by
chance
Awards & honors Among the Top 50
Business
Opportunities, The
Franchising World,
2008; Retail Design
and Visual, India
Retail Forum, 2007;
Retail Marketing

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HOW IT EARNS PROFIT?

B efore getting into the details of


the business, let’s understand
what The Loot is and how it
operates. The fashion industry
works season to season. When one
season comes to an end, the
companies try and get rid of their
excess stock by having an end of
season (EOS) sale. “After EOS
sales, companies are stuck with a
large amount of unsold inventory.
The Loot buys this stock at 50-70%
less than the MRP and sells it at 25-
60% less than the MRP. The way
The Loot operates is different from
OTHER companies which bargain
with producers on bulk quantities

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and source it directly from the
manufacturer or distributors.

AWho are its customers?


nyone who loves a good bargain.
Here is where you buy a pair of
Levi’s jeans for Rs 600. Of course,
there is no guarantee that you’ll
get another Levi’s at the same cost
the next time you visit.
The first store opened in Marine
Lines, Mumbai in 2004. It stocked
Levi’s, Lee Cooper, and Spykar
among other brands. Sales in 2007
touched Rs 23.5 crore. By then The
Loot had 14 stores across Mumbai.

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Today it is present in 85 cities with
a total of 150 stores and 600
employees.

Expanding on the Idea


Gupta has been in the garment
retail business since his second
year of college in 1996. He started
off with a multi-brand store in
Vashi, Navi Mumbai, before moving
on to exclusive stores and then
factory outlets. Eight years into the
business, he realised that there
was a section of consumers —
value conscious bargain hunters —
that no one was targeting. That
was the start of The Loot.

CHALLENGES

O nce Jay decided to put his idea


into action there was no
stopping him. That does not mean
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he had it easy. He had to face
Environmental challenges were to
fight stringent rules & regulations
and red-tapeism …. In retail one
needs to get 20+ approvals of
various laws including licenses and
non-practical laws, file various
returns etc.

The challenges were team


management & financial
management to take the company
to a much different and higher
level and keep fully equipped with
infrastructure and to handle
competition. It has been possible to
meet these challenges by having a
professional management at all
levels.

To build a competent team for


growth and development and to
clear internal and external
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misconceptions about the concept
of The Loot was the challenge
particularly convincing the
consumers about the quality of the
merchandise and convey to them
that they are not dealing in
seconds but are original surplus
product stores.

His family and friends supported


him and backed him with finances.
However Jay was contemplating
something else entirely, he says
“The only thing in my mind was to
recover and repay the loans at the
earliest.”

Since then they did recover and in


stellar fashion. Jay reports. We
have grown at a very fast and
consistent basis at the rate of
about 80% increase y-o-y and we
currently have over 110 stores pan
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India with 2 offices in Mumbai, one
in Bangalore and opening shortly in
Delhi.

With over a 100 stores within 4


years of the inception of the
company, “The Loot” happens to
be the fastest growing chain of
multi branded discount stores.

ACHIVEMENTS

I
wonder then
t is
no

that the media


sat up and took
notice. The Loot

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was nominated one amongst a
series of 12 startups – “Small Ideas
Big Changes” by The Hindustan
Times.

As per The Franchising World


(2008), The Loot is amongst the
Top 50 business opportunities in
India.

The Loot has been conferred with


the following awards:

“Star Entrepreneur Award”

“Pioneering efforts in retail concept


creation”

“Young Retail Achiever of the Year


Award”

“Star Youth achiever Award”

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Personally Jay regards the “TATA
NEN Hottest Start up award” as the
most prestigious award as yet. He
describes his entrepreneurial
journey saying “It’s an adrenaline
rush, seeing the company grow at
a fast pace and watching content,
satisfied customer’s increases this
drive.”

Jay is no stranger to success and


passed on his views on how to
attain it saying “The idea has to be
stemmed out of customer needs
and wants. There has to be enough
market potential for the business. I
also think personal observation and
experience should be put to use
building up this idea and the target
audience should be kept in mind.”

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FUTURE PLANS

Gupta is expanding his


business to tier II and III
towns. For that, he needs
money. He wanted to
come out with a Rs 100
crore initial public offering
(IPO) last year but couldn’t do it
because the market was
depressed. “Let the Sensex settle
down above 18,000. Then we’ll
take a call,” says Gupta. Till then,
the company is getting by with a
Rs 40 crore loan from the State
Bank of India and internal profits.
He wants to open 150 stores in the
next two years. Why is he being so

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aggressive? Profits. Margins in the
business are a measly 3-4% after
taxes. He needs scale.
He wants to make sure he grows at
such a pace that new entrants
cannot catch up. Six years after he
began, there have been copycats.
But they are small players. No one
has been able to replicate his
model on a national scale.
Gupta believes his systems are in
place; the time is right for
expansion.
For that he also needs competent
people to run his business. This is
where the MBA conundrum comes
in. In 2005, when The Loot began
to expand, Gupta realised he
hadn’t accounted for a lot of
factors. “You need tech support,
your management cost increases,
warehousing comes in, branding,
marketing…all these factors that
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never existed earlier become a
cost,” he says. He hired people
from the Indian Institutes of
Management and poached some
from companies like Adidas and
Levi’s. But he found that they
couldn’t help him with figuring out
these processes.
He began employing people from
“Hindi medium places”. “They
might not be able to speak to you
in English, but they’ll get the job
done,” says Gupta.
Another solution to the manpower
and real estate issue was to opt for
the franchisee route, which it did in
2007. Today, out of the 150 stores,
only 40 are company run.
Franchisees get 28-33% of the
purchase price depending on store
size.
Of course, not having the MBAs has
hurt the company. In the initial
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years, the company often used to
misjudge the quality and quantity
of stock it needed. They used to
get into problems. At the time Jay
used to say, ‘We haven’t done any
management course. So we did not
see this coming. We’ll count this
loss as our course fees,’”.

Navigating the Challenges

A major challenge for The Loot is


adequate merchandising. Brands
do not supply to it throughout the
year. Contracts are signed when
brands want to offload unsold
merchandise. One bad buy can
wipe out a large chunk of profits.
The Loot has four screenings
before it buys merchandise. “The
VP of the merchandise department
takes a look, then the president,
then the CEO and then me,” says

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Gupta. Even then, around 15% of
the inventory remains unsold. But
Gupta insists, “Everything is
saleable. You just have to find the
correct price.” The Loot sells it to
the unorganised sector at a 20%
discount to its purchase price.

BIBLIOGRAPHY

DNA NEWS PAPER


WWW.LOOTSTORE.COM
TATA NEN HOTTEST STARTUP AWARD
LIST

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