Talking shop

Self-made Indian billionaire, entrepreneur and philanthropist Mukesh ‘Micky’ Jagtiani is one of the Gulf’s richest and most influential businessmen. But despite his and Landmark Group’s meteoric rise in retail he never lets success go to his head, as Business Management’s Julian Rogers discovers.

“I believe innovation is the fuel that keeps the business going...If you don't innovate and evolve with your customers you will simply fade into oblivion”
-Micky Jagtiani

Micky Jagtiani certainly falls into the category of your archetypal rags-to-riches tycoon, having started with next to nothing and built a global empire through sheer guts, determination and a substantial helping of business acumen. Having dropped out of accounting school in London in the early 1970s, he wound up driving a taxi and cleaning hotel rooms to survive, and fund his penchant for whisky and cigarettes. Forced to return back to the Gulf, where he grew up, tragedy then struck with the death of his brother, father and mother all in the space of less than two years. His whole world was crashing down around his ears but Jagtiani called upon his business instincts and set about making a name for himself, albeit as a shopkeeper initially. By 1973 this fresh-faced 21-year-old ploughed a few thousand dollars of inheritance into opening a store that his brother had leased in Bahrain before his death from leukaemia. With a burgeoning expatriate population in the Gulf state Jagtiani unveiled Babyshop – a store stocking toys, prams and baby clothes. "It was a tough start and I had to work very hard to make ends meet," Jagtiani reveals from the Landmark's headquarters in Dubai's Jebel Ali. "I spent a lot of time clearing goods in the ports and stacking them in the warehouse before going to the shop. On a good day we would make about AED2000, which often called for a celebration in a Chinese restaurant."

He recalls a tremendous camaraderie between himself and his workforce in the early days at Babyshop. Some of these staff have stayed loyal to Jagtiani through thick and thin. "I was able to overcome the initial challenges because I had good people working with me. The team spirit was great and we were committed to what we were doing. Most of these employees are still with the group and have attained key positions within the organisation, heading various businesses." With such a modest start to his working life, it is unsurprising that he could never have imagined himself becoming an international retail magnate with a personal fortune estimated at US$3 billion. Indeed, in 2008 Forbes ranked the Landmark chairman 462nd in the league table of global billionaires and India's 16th wealthiest. "Though I didn't know how big Landmark Group would become, I was very ambitious and keen to expand; so each time I surpass my growth goals I set the bar higher." He adds: "One of the biggest lessons I have learnt in business is to never allow success to lead you to complacency because success is never final. I have built my vision around this philosophy and never stopped looking for ways to provide exceptional value to my customers. Obviously it is working."

Taking full advantage

From the sweat and toil in the early years of running the single baby shop, Landmark Group has spread its tentacles into furniture, cosmetics and footwear, and even hotels, food and electronics for the mid-market consumer. In 1992 Jagtiani relocated his family to Dubai - during the dawn of an economic boom as the emirate began to transform itself into a global business and tourism hub. Taking full advantage of the petro-dollars sloshing about in the Gulf, as well as an influx of foreigners and huge construction projects being given the green light, Jagtiani was able to quickly morph his business into a diversified entity with more than 31,000 employees across the Middle East, Egypt, Pakistan, Spain, China and India. Indeed, in his native India Jagtiani says business is "doing very well" thanks to over 120 stores and a turnover in excess of US$300 million. Landmark's portfolio of 900 stores in 15 countries includes Home Centre, Babyshop, Splash, Shoe Mart Centrepoint and more, while franchises are also held for the likes of New Look, Reiss, Lee Cooper and Aftershock.

So what's the secret to ruling in retail? "Our value offering, coupled with the growth into new locations, uniquely positioned us to cater to the larger mid-market consumer base and helped grow market share in a fiercely competitive environment", says Jagtiani. Being aware of changing spending habits and trends is key too for Landmark. "First, we take our customers very seriously and constantly adapt to their needs and preferences. Other factors include financial discipline and our wide span of control over sourcing, logistics and distribution." Moreover, this 57-year-old and father of three believes his natural business instincts and his uncomplicated lifestyle have proved a recipe for success. "I have always lived a life of simplicity and this is definitely one of my mantras of success. A simple formula I have followed all my life is to carefully listen, constantly adapt and always deliver. This, along with speed in everything I do, has earned me rich dividends. As an entrepreneur, I invest substantially in understanding market conditions and knowing where the opportunities are located. As a result I am able to take calculated risks. Research is, and has always been, one of my strengths. I always like to emphasise the need for research, research and more research." His research and gut instincts were behind his decision last year to take a nine percent stake in UK high street favourite Debenhams, a move which was based on being able to eventually make a profit on his investment and not the first step in a full-blown takeover. Other potential investment opportunities in the UK, US and closer to home are still on his radar but he remains tight-lipped on retail assets he is planning to acquire and investment plans up his sleeve.

Spending habits

But while Jagtiani's detailed research and ability to sniff out a good deal has been instrumental in Landmark's proliferation, the unexpected recession has been another challenge very few could have forecast. The retail sector as a whole has certainly been feeling the pinch because when times are tough consumers tend to tighten their purse strings and only make essential purchases. The GCC retail markets have witnessed a significant fall in the luxury goods segment as consumers look for cheaper alternatives, says Jagtiani. "Clearly, there has been a drop in consumer spending as a result of the economic downturn; consumers have become more discerning as they demand more value for their money's worth. In general, customers have been cautious with their money since the recession surfaced in the region. People have spent more on essentials and controlled their expenditure on items they considered as frills. However, the market condition is slowly improving with the belief that the worst is behind us and it's time to look forward." And looking forward he is. This includes an aggressive expansion drive into Cairo, Egypt and the rest of the Middle East. "We are looking to continue our ambitious expansion drive in Egypt and across the region – in fact, we recently opened a 200,000 square foot Centrepoint, Homecentre and Max in Alexandria, Egypt, in addition to opening a Max store in Yemen." Jagtiani has also launched four new brands, Gourmet Station, Spaces, Beauty Bay and Shoexpress, in Dubai this year and the bigger picture is to take these brands across the region.

The bedrock of the expansion plans is built on the ability to keep innovating and coming up with fresh ideas. "I believe innovation is the fuel that keeps the business going," Jagtiani remarks. "If you don't innovate and evolve with your customers you will simply fade into oblivion." He goes on to say: "Companies that do not innovate often collapse within a short time because their customers get ahead of them and their offering becomes perceived as stale. Innovation is at the core of everything we do at Landmark Group and that is why we keep adapting to changing market needs and looking for new ways to deliver exceptional value to our customers." And it's not just in the stores where this philosophy is visible. For instance, Landmark Group is one of the only retailers in the Middle East to manage its own logistics and re-distribution centre, which is a sprawling, state-of-the-art facility spread across 360,000 square feet. The group also boasts the largest customer loyalty database in the region – the Centrepoint Privilege Club, which has over one million active customers. Not resting of his laurels and capitalising on brand loyalty has stood the group in good stead to beat this difficult economic period.

A helping hand

Although Jagtiani is one of the most affluent and influential businessmen in the Middle East and West Asia, he isn't your stereotypical billionaire surrounded by the lavish trappings of wealth such as his own yacht, helicopter or fleet of supercars. He's more interested in living a simple life – flying economy class and adding to his already impressive collection of Buddhas.

Another of his passions is LIFE (Landmark International Foundation of Empowerment), which he established in 2000 to support underprivileged children in India. Its initiatives include school and healthcare development programmes such as setting up a home for destitute children, vocational and non-formal schools, community clinics and medical camps for slum-dwellers.

LIFE also operates a Centre for Learning Disability and reaches out to over 50,000 beneficiaries annually across Mumbai, Chennai and Bangalore, Jagtiani explains. He is also looking to spread the support programmes to the Middle East in the near future. "There is no bigger gratification for me than the feeling I get from empowering people to build better lives for themselves and their families." Jagtiani puts in around US$2 million of his own money into the fund every year and his ambition is to provide satellite televisions for Indians. When in India he is conscious about being seen to flaunt his wealth so makes every effort to fly economy class and sometimes takes third class trains. "What gives me the greatest satisfaction is the ability to touch lives and positively impact the society through my business," he enthuses. "Today Landmark Group employs over 31,000 people who are financially empowered to support their families. We keep our customers happy through the exceptional value they get from our products and we keep our suppliers in business and help them support their families and pay their employees. We also contribute to building a better society through our numerous corporate social responsibility initiatives so these are the things that drive me in business and these are the reasons we will continue to grow and touch more lives."