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Shrestha Tailoring dressing nepal elegantly
In Nepal, until ten years ago, branded tailoring service was not expected to have a good potential for growth. Almost all of the well-known tailoring shops of the era before 1990 have either closed down or changed into ready-made garment firms when the garment export business started flourishing. However, there are now over 15 branded tailoring outlets in Kathmandu alone and most of them are franchises of foreign brands. In this competitive market, Shrestha Tailoring stands out as the most successful Nepal-grown brand of such services.
Shrestha Tailoring was started around 2034 BS (about 28 years ago) as BK Tailors with an investment of about Rs. 500 borrowed from a bank. The earning was good-Rs. 100 per day, as BK Shrestha, the proprietor of the firm, recalls.
The firm was renamed Sangam Tailors two years later by installing seven new machines. The main business then was making jeans garments, which Nepali students studying abroad would take with them. Then in 2041 BS, the firm changed the name to Shrestha Tailoring, which now has two outlets-in Baghbazar and in Chabahil-with an investment of some Rs. 100 million and with about 50 employees.
When asked to reveal the secret behind the success of his firm, Shrestha names advertisement as the major one. The focus of the firm is on consistent advertising. For example, it has set aside a fund of Rs. 20,000 to Rs. 30,000 per month for advertisement and that has not been changed no matter how the market changes. That money is spent mainly on radio and TV commercials.
In the early days, the firm used well-known models of that time such as Anudan Rana of the Shikhar cigarettes fame to promote the brand. They also organised some fashion shows. These days Shrestha is, however, not satisfied with the models and the photography. 'The quality has gone down over the years while the cost has gone up. So there is a mismatch and the benefits from such promotional efforts nowadays are less than the costs,' he complains.
One remarkable point about management of the Shrestha Tailoring is that despite the big volume of the business, it does not use qualified managers in that it has no business school graduates in its payroll. The reason is the personal conviction of Shrestha that the people trained in such schools may have theoretically sound knowledge but the practice in the Nepali market could be quite different. Though one of his sons is doing his MBA in India, he does not think that his son will join in the family business. This is further hampering the expansion of the business. 'The business needs support from the family in order to open other outlets as it is not easy to entrust the business to outsiders,' he says. The Chabahil outlet is being managed by his nephew.
Most of the people in the support lines in the firm are relatives of Shrestha though the technical people are from outside the family. The policy of the firm is to have only Nepali workers. 'Foreigners may be more skilled workers but they need extended holidays to go home. This hampers business,' he says. While some entrepreneurs feel uncomfortable employing relatives because it is difficult to be strict with them, Shrestha says that he has not faced such problems. 'If you treat all the employees equally, there will be no problems.'
Shrestha is regarded a strict employer. During the last Dasain festival, there was a workers' strike in the firm demanding higher pay and various facilities. 'I rejected that demand firmly because once you relent you set a trend and it will open the gates for future difficulties.’
Another example of consistency provided by the Shrestha Tailoring is regarding borrowing. The firm is borrowing from the Rastriya Banijya Bank (RBB) from where it borrowed the first loan. While many borrowers of RBB have moved to other new banks, Shrestha says that it is good to borrow from RBB as its interest rate is lower and there is an environment of trust developed between the firm and the bank. 'Therefore though it takes longer to process loans in RBB, it is fulfilling our need and I'm happy with it.'
In the course of business expansion, Shrestha has also set up a restaurant near his tailoring shop. What is the synergy? 'In this business we have to spend a lot in customer entertainment. Moreover, the workers spend a lot of time if they go out for lunch and afternoon snacks. The restaurant nearby has helped to save time.'
Shrestha says that 60% of his customers belong to the middle income bracket. Of the remaining, 20% belong to the higher income group and 20% to the lower income group. 'Our target is to be able to serve the higher income group better because that is where the scope for further growth lies,' he says.
The firm now intends to install a computerised suit cutting machine, but is hesitating because the machine cost and the associated expenses involve around Rs. 10 million. Therefore Shrestha is now exploring the possibility of getting business for such a machine from other tailoring firms too.
One interesting fact revealed by Shrestha is that though visibly the western style dresses seem to have controlled the entire market, traditional Nepali dresses like Daura-Suruwal are still in good demand. “In fact, the demand for Daura-Suruwal is increasing and this dress is gradually developing,” he says. And he does significant business selling Daura-Suruwal as well, though he did not give exact figures.
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