Raymond: Giving a New Spin to Khadi

The case ‘Raymond: Giving a New Spin to Khadi’ talks about the efforts of Indian textile major
Raymond Ltd. (Raymond) in re-positioning India’s traditional fabric ‘Khadi’ as a new fashionable
fabric, as part of its growth strategy. The case starts with a brief look at Raymond’s history and its
textile innovations. It then gives a short history of Khadi and its importance in the Indian milieu. The
case discusses in depth Raymond’s deal with the statutory government body Khadi Village and
Industries Commission (KVIC) that branded and promoted Khadi. The deal allowed the company to
offer ‘Khadi by Raymond’. The issues that Raymond faced in making Khadi market ready are also
described. Raymond’s efforts at changing certain pre-conceived notions about Khadi through a new
advertising campaign are discussed as well. The case ends with a brief look at the future prospects of
Raymond in the Khadi space.

Issues

The case is structured to achieve the following teaching objectives:

• Scrutinize the re-positioning strategy of a traditional brand.

• Appraise the nuances of a strategic alliance.

• Evaluate the social impact of a public-private business partnership.

• Examine the new marketing mix of a brand.

• Analyze the marketing strategy undertaken by a company to alter customer

perceptions.

INTRODUCTION

In June 2019, leading Indian textile company Raymond Ltd. (Raymond) announced that during FY
2018-19, the company had been able to create over three million work hours for artisans who made
the traditional Indian fabric – Khadi – and had given them wages that were 30% higher than the norm.
The company further claimed that it had significantly developed the tailoring ecosystem in India.
Gautam Hari Singhania (Singhania), Chairman and Managing Director (CMD), said, “In a bid to
encourage inclusive growth, Raymond continues to enrich the tailoring ecosystem, providing a
platform for skill development in the textiles and apparel manufacturing industry by rapidly adding
tailoring hubs across the country.”..

RAYMOND’S JOURNEY

In 1925, much before India’s independence, a small woolen mill was established in Thane,
Maharashtra, called Raymond Woollen Mill. The mill mostly produced low-priced woolen fabric and
coarse woolen blankets. In 1944, the mill was acquired by prominent businessman Lala Kailashpat
Singhania (Kailashpat), who owned the J.K. Group of companies which dealt in various chemicals.
The acquisition of the mill was in line with the company’s business expansion strategy.

Throughout the 1950s, Kailashpat worked to grow and diversify the company’s production capability in
wool. He invested in technology and the company undertook R&D to produce new wool grades and
fabrics. In 1958, the company produced a new type of wool called ‘Terool’ – wool blended with
polyester. The fabric went on to become a success and it served as a frontrunner in the series of
superfine fabrics which the company launched in later years. ...
WINDS OF CHANGE AT RAYMOND

Despite Raymond’s innovations in textiles and its strong retail footprint, it was still not financially
sound. By the mid-2010s, Raymond had been facing a deep financial crisis for some years. The key
reason for the company’s decline was the rise in brands, both Indian and international, which offered
custom-tailored clothing and readymade clothing. Between 2009 and 2013, while the cost of capital
and interest charges rose, the margins of the company fell by 5%....

KHADI – INDIA’S TRADITIONAL FABRIC

Khadi was considered a traditional fabric in India that was woven on handlooms using yarn that was
hand-spun from cotton, wool, or silk or any combination of two or all these yarns. In India, the yarn
was spun using the ‘Charkha’, a small wooden spinning wheel...

THE AGREEMENT BETWEEN RAYMOND AND KVIC

In 2016, the time was ripe for both Raymond and KVIC to collectively make a new move in the Khadi
space. In December 2016, Raymond signed a Memorandum of Understanding (MoU) with KVIC. The
public-private partnership (PPP) was a first of its kind initiative in India between two Indian brands
(Raymond and Khadi), which were thought to be representative of the cultural heritage of India...

RAYMOND’S EFFORTS TO MAKE KHADI MARKET-READY

As part of the agreement, Raymond agreed to a guaranteed minimum procurement of Khadi and
Khadi products for a period of five years. The company made primary purchases of muslin cotton,
wool blends, and silk from KVIC...

THE LAUNCH OF KHADI BY RAYMOND

In May 2017, Raymond launched the new ‘Khadi by Raymond’ product line at a fashion show. The
new product line included a variety of fabric blends and ready to wear apparel. Industry observers
opined that never before had Khadi been presented with so many customer options...

THE PROMOTION OF KHADI BY RAYMOND

In India, Raymond had a strong brand presence. The common belief was that the first suit that an
Indian man ever purchased would be a Raymond one. Keeping that in mind, the company positioned
itself in the premium segment. Raymond’s main communication message was centered on the theme
of ‘Raymond: The Complete Man’. Raymond mostly positioned itself as an occasion-led brand with
customers expected to make purchases at special events in their lives such as, weddings and
birthdays, among other occasions...

THE FUTURE OF KHADI BY RAYMOND

In FY 2018, Raymond purchased as much as 0.72 million meters of grey khadi fabric. Raymond,
which had started out working with 20 Khadi clusters across India, had increased its association to
more than 75 clusters in 16 Indian states, by December 2018. To further complete the company’s
Khadi collection, Raymond added shoes and accessories such as tie pins and lapel pins....

Source: https://www.icmrindia.org/casestudies/catalogue/Marketing/Raymond_Giving-Case.htm