CASE – 2 Biyani – Pioneering a Retailing Revolution in India

“I use people as hands and legs. I prefer to do thinking around here.”─ Kishore Biyani, CEO &

MD, Pantaloon Retail (India) Ltd.

Kishore Biyani (Biyani), CEO& MD of Pantaloon Retail (India) Ltd., planned to have 30 Food

Bazaar outlets, 22 outlets in Big Bazaar, 21 Pantaloons outlets, and four seamless malls under the

Central logo, by the end of 2005. He also planned to launch at least three businesses every year and

had already selected music, footwear and car accessories as his next areas of investments. He was

already the top retailer in India followed by Raghu Pillai of RPG. As of 2004, Biyani headed a

company that had a turnover of Rs 6,500 million and operated 13 Pantaloon apparel stores, 9 Big

Bazaars, 13 Food Bazaars, and 3 seamless malls (Central), one each located in Bangalore,

Hyderabad, and Pune.

Biyani’s journey from a person who looked after his family business to India’s top retailer in

1987, when he launched Manz Wear Pvt. Ltd. The company launched one of the first readymade

trousers brands – ‘Pantaloon’ – in the country. The company also launched its first jeans brand

called ‘Bare’ in 1989. On September 20, 1991, Manz Wear Pvt. Ltd. went public and on September

25, 1992, it changed its name to Pantaloon Fashions (India) Limited (PFIL). ‘John Miller’ was the

first formal shirt brand from PFIL.

The company opened its first apparel stores, called ‘Pantaloons’ at Kolkata in August 1997. The

stores generated Rs 70 million. Biyani then realized the potential of the Indian market and

started to aggressively tap it. Accordingly, Biyani decided to expand into other segments of

retailing besides apparel. To reflect this change in focus, the company changed its name to

Pantaloon Retail (India) Limited (PRIL) in July 1999 and set itself a target of achieving Rs 10

billion in sales by June 2005. In course of time he launched three other retail formats -- Big

Bazaar, Food Bazaar, and Central.

Biyani didn’t believe in copying ideas from western retailers. He was critical of his peers who felt
just copied ideas form the west without making any effort to mold them to Indian conditions. He

ensured that his store formats such as Big Bazaar, Food Bazaar, and Pantaloons were all suited to

the purchasing style of Indian consumers.

The Indian Institute of Business Management & Studies

Subject: General Management Marks: 100

Biyani was a huge risk taker and his planning was always different from the conventional way of

doing business. This was also one of the factors that had prompted Biyani to move away from his

father’s conventional way of doing business. During the initial stages of his success, his risk-taking

attitude sometimes had the effect of turning away financiers. The biggest risk that Biyani took was

in opening Big Bazaar in Mumbai in 2001. The company needed money to expand Big Bazaar’s

operations. However, it had profits of only Rs 40 million with a low share price at eighteen rupees.

Therefore, Biyani could not raise money through equity. In light of this situation, Biyani took a loan

of Rs 1,200 million from ICICI for launching the operations of Big Bazaar, which increased his debt

exposure. However, Big Bazaar proved to be a resounding success with 100,000 customer visits in

its first week of operations. According to analysts, if Big Bazaar had failed, Biyani would have

landed in a severe debt crisis. The success of Big Bazaar not only increased the company profits, it

also changed the perception of investors.

Many people criticized Biyani for not delegating authority and Biyani himself accepted the

criticism. He said, “I use people as hands and legs. I prefer to do the thinking around here.” He

preferred taking individual decision on activities like strategic planning, ideas for other ventures,

and other important issues. It was because of this that managers like Kush Medhora of Westside

were initially apprehensive about joining Biyani’s business. However, Biyani changed his attitude

gradually with the launch of Big Bazaar, Food Bazaar, and Central and appointed different people

for managing different business units.

Biyani believed in leading a simple life and in being simply dressed. His vision came from his

diverse reading connected to retailing and other areas. He made it a point to visit each of his stores

across the country. He aimed to spend at least seven hours a week at the stores. In the stores, he

would stand at a corner and observe people. He also walked on streets, met common people, and

talked to local leaders to plan and put up new products in his stores. Each of his stores was set with

a weekly target, which was reviewed every Monday. Whenever a new store was opened, the details

of its operations during the first 45 days were to be sent to him. Sometimes, he suggested remedies

to some problems. Biyani believed in extensive advertising to make more people know about the

product. His decision making was quick and devoid of unnecessary delays. Biyani was also a good

learner and learned quickly from his mistakes. He planned to improve inventory management

through responding effectively to the demands of the customers rather than forecasting them, as he

felt that forecasting would pile up the inventory in this dynamic market.

Questions

1. The tremendous success of the ‘Pantaloons’, ‘Big Bazaar’ and ‘Food Bazaar’ retailing formats,

easily made PRIL the number one retailer in India by early 2004, in terms of turnover and retail

area occupied by its outlets. Explain how Biyani is further planning to consolidate his businesses.

2. “Our striving toward looking at the Indian market differently and strategizing with the

evolving customer helped us perform better.” What other qualities of Kishore Biyani do you think

were instrumental in making him top retailer of India?