Case Study of Fabindia Overseas Pvt. Ltd.

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Fabindia (or Fabindia Overseas Pvt. Ltd.) is an Indian chain store retailing garments, furnishings, fabrics and ethnic products handmade by craftspeople across rural India. Established in 1960 by John Bissell, an American working for the Ford Foundation, New Delhi, Fabindia started out exporting home furnishings, before stepping into domestic retail in 1976, when it opened its first Fabindia retail store in Greater Kailash, New Delhi. Today it has over 135 stores across India and abroad, and is managed by his son, William Bissell. In 2008, Fabindia had a revenue of $65 million, marking an increase of 30% from the previous year. Fabindia sources its product from across India through 17 community-owned-companies; a certain percentage of the shares of which are held by artisans and craftpersons. The products of Fabindia are mainly sourced from villages helping to provide and sustain rural employment in India. They are currently produced by over 40,000 artisans and craftspeople across India. Today, Fabindia is considered one of the most profitable retailers in the country. It earns a net margin of 8%, nearly three times more than the industry average, evoking the envy of every rival. What's more, under Bissell's leadership, Fabindia has almost singlehandedly built a network of a rapidly vanishing breed of handloom weavers and artisans, which in turn supply handicrafts to a loyal set of city folk across India's 35 top towns through its network of 144 stores. Fabindia's elaborate--and almost dedicated--supply chain organization is now in place, thanks to Bissell, who co-opted 22,000 artisans and made them into shareholders through an elaborate community-owned model that became the subject of a Harvard Business School case study in 2007 and made Bissell a poster boy of inclusive capitalism. Even though Fabindia has a huge share of mind, at Rs. 404 crore, its turnover is smaller than some of the kids brands like Gini and Jony or Lilliput. Bissell knows he...
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