News & MediaApril 01, 2012
Raju Shroff Interview: Regal Group
The problem with interviewing Raju Shroff is that you know he's going to be wearing a better suit than you. And he can probably tell exactly how much you paid for yours.
But then nobody should expect anything less: the boss of the textile giant Regal Group has been at the heart of the industry for nearly three decades, and now oversees the entire operation set up by his legendary father, Vasu Shroff. And it is some operation: retailing, wholesaling, indenting and stitching.
Just for good measure, there is a technology company, a real estate investments operations and even talk of one day going into events management. Little wonder most experts put a $500m plus valuation on the empire started from scratch.
"To me now it is all about success and achievement, money is a secondary motive. It is about doing something great, something big and something special. And I think we are doing all three," says Raju Shroff.
Few would argue with that. Around 600 wholesalers are constantly battling for a chunk of a $3bn textiles import market in the Middle East, though by most measures, Shroff's Regal Group is the leader of the pack, with 210 of the company's 350 employees dedicated to textiles. With a big say in retailing, distribution, indenting and stitching, the group has successfully cornered the entire supply chain of the industry, and apart from manufacturing, is involved in just about every aspect. It has fourteen retail stores in Dubai, six separate distribution outlets and three divisions of indenting for Europe, Asia and India/China. A massive expansion of its retail outlets across the GCC, including the so-far-untapped Saudi Arabian market is on the cards in the coming years, and after taking a few hits during the recession, Shroff is confident that the worst is over.
"We were here during the good times and like many people made the most of it. Our businesses grew by 30 percent between 2004 and 2008. Yes, it dipped after that but by last year it was jumping again. In certain pockets, such as retail things have stabilised, though we have been more cautious in our distribution and wholesale businesses. Don't forget we sell all around the region, so in places like Libya, Tunisia, Iran and Syria, where there is obviously an element of risk, we have held back," he says.
Shroff adds: "Apart from manufacturing we do everything. When we do our own purchases we go to a factory in India, China or Europe, we decide on the fabric and we create — we outsource most of it, we have designers in France and South Korea. We outsource the material and design, and we import it into our wholesale division. Our skill is choosing the right designs and products."
Right now, growth is the key. The retailing side accounts for around a third of the Regal Group's revenues, but Shroff admits the focus in the past few years has been very much on distribution. That is changing, with new retail outlets planned for Saudi Arabia, Oman and Kuwait, on top of the Doha store which was opened in December last year.
"Saudi Arabia is a huge market but we never tapped it directly. It's a very big but also very complicated market. We now have a team of people who understand the mindset and the logistics and so we plan to grow there in the coming years," he says.
But as boss of the entire group, it isn't just textiles that Shroff keeps his eye on. Regal Technology was set up in 1989 and over the years, the company has extended its capabilities to include professional low voltage systems like CATV, SMATV, security/CCTV and audio/video products and systems. On top of that, Regal Group Investments is involved in investments in bonds and equities, focusing in the past on real estate.
Not bad for a group that began in 1952 when Regal Traders was set up on the banks of the Dubai creek, to deal in wholesaling and indenting of fine fabrics from Japan and India. Although the company was set up by Shroff's father Vasu, Shroff — now 45 years old — has been involved for a long time. He recalls being just seventeen and coming home early from school to learn basic computing in his father's office. Before too long he had developed programmes for the company's indenting system, and helped Regal establish one of the region's first ever online-banking platforms. "For me it's never been a case of doing something outside the family business, though I wanted to do my own thing within Regal and prove myself from an early age," he says.
His own big break came very early, during the 1987 Cricket World Cup being held in India and Pakistan. A friend of his in India has got hold of a satellite dish and managed to pick up the television signals from a remote village 200 miles outside Bombay. Inspired by this — long before the days of BSkyB — Shroff asked his friend to send him one to Dubai.
"So I got one and as it turned out, during the World Cup, mine was the only house in Dubai where you could watch the games live. There was a mad rush! A friend of mine owned a hotel in Bur Dubai and asked me to move the dish to his hotel, and in return would give me a share of the revenues. I did, and did very well out of it. I figured this was a brilliant business, and ordered 20 sets which sold out. I then ordered 100, 200 — eventually 2,000. Star TV launched in India and the whole thing just took off," he says.
This soon led to the creation of Regal Technologies, though Shroff eventually put his brother in charge of that operation before moving back into the textiles side of the business, and eventually took over the entire group from his father.
Whether his own son follows in his footsteps remains to be seen, with the younger Shroff currently pursuing a career in music. But Raju Shroff says: "He is in LA studying — I told him he is not required here but I would like him to [come back]. He wants to do music. I said just do one thing — learn a bit about business and accounting. If you can make money on your own, great, but you have to learn how to manage it. Two years ago I said 'Look at Michael Jackson, the biggest star in the world and he is nearly bankrupt'. You have to learn how to manage money, whatever you do. Maybe my son will join the Regal Group but in the same way I started a technology company, he may do his own thing along the lines of music or events management."
The future for the group certainly looks bright, and looking ahead to the next two decades, Shroff says merely doubling the size of the business won't be enough — he has his eyes on quadrupling it.
"Because I am running the family business there is a lot more pressure on me. I have to fill the shoes of my predecessors. My father grew this so much, he achieved so much. Now I want to do the same," he says.
At this rate, he has every chance of succeeding.