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Tuesday, November 29, 2022

How did a college kid Faizal Ahamed build Rs.50 cr apparels business Suxus from Rs.5 lac

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An apparels brand built by a college kid is now a Rs 50 crore business. Faizal Ahamed launched Suxus with just a Rs. 5 lakh investment.

Faizal Ahamed, who is 32-year-old now, founded the business with three tailors and seven sewing machines in 2006 in Madurai. He says customers can buy a T-Shirt for the cost of a cup of tea at any of his outlets. The men’s clothes brand is now dominating the Tamil Nadu garment retail market. Ahamed was studying in college when he invested Rs 5 lakh to launch a shirt making unit.

When clients arrive in huge numbers for branch openings in new cities, long lines spanning over a kilometre can be seen outside their establishments. On August 15, it was Chennai’s time to behold this spectacle, as a new store opened in Anna Nagar.

Ahamed gets these videos of the crowd put on their pages on social media, which leads to greater foot traffic and boosts business.

He says, Suxus sells shirts, t-shirts, trousers, and denims for Rs 30 to Rs 399. Their annual sale per square foot is Rs 55,000. It is more than the industry average of Rs 7,000 per sq ft and higher than the industry high of Rs 13,000 per sq ft (D Mart).

Ahamed comes from a family that has been in the textile trade for two generations,. He just had to enter the industry to help his father, who had a debt of Rs 65 lakh that was settled by selling a family property.

Ahamed recalls, “My grandpa, along with his two brothers, founded Indian Cloth Depot (ICD) in the 1940s at Vilakuthoon in Madurai. During the 1970s and 1980s, the company thrived. ICD was Binny, Mafatlal, and Premier Mills’ wholesale distributor. We sold shirtings, suitings, saris, and blouse pieces to all of Tamil Nadu’s prominent retailers.”

But, the next generation was unable to run the company professionally, and the business suffered as a result. He claims that by the time he was in class ten, we were in poor shape. We were a lower-middle-class family living in a leased house. My father became deeply in debt, and I recall those trying years vividly when I was in school, from grade nine to twelve.

Ahamed says, “We sold family assets to pay off the debt and I had to give up my desire of studying overseas.” He then did B.Com from American College in Madurai.

He was 17 years old and in his first year of college when his father led him to visit Pothiraj, the director of Pothys (a textile business in Tamil Nadu), who urged the couple to create shirts and supply them to their shops.”

Following his advise, Ahamed invested Rs 5 lakh in a shirt manufacturing facility. It was an enterprise that would capitalise on the family’s historic expertise of materials and expand on the strength of its ties with state textile retailers.

Ahamed says, “We sold our Indica car for Rs 3 lakh and borrowed Rs 2 lakh to fund the business. He began at a rented space on Madurai’s South Masi Street, producing 100 shirts every day under the brand Suxus.”

They only supplied Pothys at a cost of Rs 250 per shirt and generated a profit of Rs 15 on each piece. Ahamed worked carefully on the costing from the start, putting his skills of accountancy and commerce to good use. He has turned Suxus into a Rs 50 crore revenue brand by learning from his failures, and making course corrections along the way. Ahamed finally setted on the ‘low-price’ formula, which has proven to be the key to his success.

Ahamed built his first exclusive brand outlet (EBO) in Madurai in 2011, and six months later, he opened another in Erode. They had five locations by 2013. However, the stores did not generate the predicted sales, and the company began to lose money. To make the model sustainable, Ahamed had to revamp their costing and sourcing techniques, lower margins, and focus on backward integration. For the next year, they tested the low-price technique in Erode before expanding it to Madurai and other locations.

In response to the question about the quality of their items, particularly the Rs 20 t-shirt, and how long could you use it, Ahamed says, “It is a fallacy that if you pay more, you will get a higher quality product, and if you pay less, you will get a lower quality product. We have initiated a campaign to change people’s opinions about this. The Rs 20 t-shirt will endure for six months and can survive any number of washes during that time.”

Ahamed, has an 8-year-old son and spends his Sundays with his family. He is a frequent participant in entrepreneur forums such as Young Indians and Young Entrepreneur School (YES).

Faizal Ahamed is a big fan of motivational speakers Shiv Khera and Robin Sharma, as well as financial guru Anil Lamba. He enjoys participating in leadership programmes given by prestigious universities.

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