NEW YORK — For Marvin Traub, ex-Bloomingdale’s chairman, deal-maker and international consultant, one destination has been most alluring. He’s traveled to India 15 times over the last 40 years in an ongoing journey of mercantilism and discovery.
After orchestrating Indian import promotions three times at Bloomingdale’s and assisting on one at Lord & Taylor over the years, he’s in a role reversal. Instead of bringing Indian products to the U.S., he’s launched a strategy of introducing American and European brands and designers to India, under a partnership formed in December with Mohan Murjani, called Murjani Traub India Ltd. The partnership intends to own and operate stores there, and establish wholesaling.
A year ago, Murjani attained the master license to open Tommy Hilfiger stores and distribute the designer’s merchandise in India. Traub said the partnership is negotiating with more than a half dozen “major” brands for similar rights, though he won’t say with whom just yet.
“I expect to launch another major brand in March or April,” said Traub, during an interview disclosing his latest overseas venture. Traub said he’s also advising developers and retailers in India on merchandising and expansion. He has known Murjani for 29 years, ever since Murjani launched Gloria Vanderbilt jeans and got his first major order from Bloomingdale’s. Murjani hails from Hyderabid Sind, an area in Pakistan that was formerly part of India.
Compared with the West, India is virtually devoid of American and European designer brands, aside from some fragrances and a few dozen designer shops in hotels and airports, including Hugo Boss, Zegna, Louis Vuitton, Bulgari and Mont Blanc. A handful of mass labels, like Lee and Levi’s, and some footwear brands, such as Nike, are present as well.
Murjani said the Hilfiger business in India will generate $20 million to $25 million in sales, at retail, in 2005. Hilfiger receives royalties off the sales, but Traub and Murjani would not disclose how much. There’s also a wholesaling and licensing dimension, with Hilfiger watches, underwear, sunglasses and shoes being distributed to about 100 retailers in India. For example, Titan, which owns 60 percent of India’s watch market, is the licensee for Hilfiger watches.
However, the influx of Western products to India has been slow. One reason is that upon securing its independence in 1947 from the British, India imposed restrictions on importing many consumer products until the late Eighties.
Traub and Murjani are betting on exponential growth in consumer demand in India, fueled by the rise of jobs related to outsourcing, and the growth of nonresident populations filling those jobs, with many U.S. residents of Indian descent returning to India.
There’s a huge awareness of Western products and style. According to Traub, “India has never had censorship and has always been exposed to things in the outside world. Ten years ago, the laws made it difficult to import, but taxes have been lowered and import restrictions lifted. Traditionally, Indians wore saris. Now a number of young women are wearing Western dress, typically jeans and tops; men’s shops are more advanced.”
In 2000, India’s organized retail industry was estimated at around $3.5 billion; it’s estimated at $10 billion in 2005, and should grow at an accelerated pace in the years ahead, according to a PriceWaterhouseCooper analysis, supplied by Murjani. In 2001, India’s first three shopping centers opened. According to Traub, there are now 47, and 250 to 300 malls are projected to be built in the next five years. India is the second fastest-growing economy in the world after China.
“With the growth of the Indian economy and the slowing down of retail business in most Western countries, certainly India is one place to look for growth,” said Traub. “But there are not that many people in India who understand how to develop and nurture a brand.”
Murjani predicts “an absolute explosion” of consumer demand for fashion in India. “It’s all part of a total change in the country,” he said. “It’s the youngest country in the world, with 65 percent of the population under 35, and 50 percent under 25.”
The rapidly growing service economy due to outsourcing goes beyond the establishment of call centers, involving sophisticated planning and analysis for industries such as aircraft engineering, Murjani said. “There are a growing number of young Indians finding jobs. They have an aspirational desire to own consumer products such as brand name apparel, watches, flat-screen TVs, cell phones. Everyday, 70,000 new cell phone accounts are opened in India.”
Murjani has opened six freestanding Tommy Hilfiger stores in the last six months and, now working with Traub, will open six more in the next three or four months, all ranging from 2,500 to 5,000 square feet. Compared with the other designer stores in the country, “We visualize selling brands much differently,” Traub said.
Traub and Murjani are both entrepreneurs involved in a range of businesses. Murjani has shipping operations in the Far East and Africa, and runs the Murjani Group apparel business. He was the original backer of Tommy Hilfiger, from 1985 to 1989, and launched Coca Cola apparel, as well as Gloria Vanderbilt jeans. Murjani’s son, Vijay, is running the operation in India with a team of 30 based in Mumbai. The team works with locals to get stores up and running, from arranging the design, fixturing and flooring to recruiting and training people and marketing.
Traub runs Marvin Traub Associates, a consulting business at 350 Park Avenue here. He considers himself in his third career. The first was with Bloomingdale’s, where he rose to chairman and chief executive officer in the Seventies and left in 1991; the second was with Financo Inc., where he was a senior adviser, and the third is his own firm, where he consults on malls to beef up the merchandising; on brand-building through licensing and increased distribution, and start-ups in which he could have a stake.
He’s been involved in the expansion of Harvey Nichols in the Middle East, as well as mall projects in Panama City and Athens, and the Time Warner Center here. He also brought the Jacques Dessange hair brand to the U.S. Traub obtained a piece of Jacques Dessange by forming a company called French Beauty Services to market the brand in America.
He’s also managing the North American distribution of London-based Pout color cosmetics; licensing Grant boxing equipment into apparel and lifestyle categories, and has helped reshape Moscow’s largest department store, Tsum, into more of a designer emporium, having brought in Armani, Bottega Veneta, Gucci, Yves Saint Laurent and other brands.
Traub prides himself on launching and catapulting new products and staging big events. For much of his stewardship at Bloomingdale’s, he was considered the nation’s foremost retail impresario, often compared with the late, legendary Stanley Marcus.
What’s most interesting about Traub is what drives him to the next project. He’s never shy in discussing his latest overseas venture, or his Bloomingdale’s extravaganzas, like the day the prime minister of India, Moraji Desa, visited nearly naked, in a dhoti loincloth.
However, this year, Traub turned 80. It’s one subject he feels reluctant discussing, though it’s hardly a secret, since he’s planning a bash in April in the Rainbow Room. “It’s a big party, sort of a private thing. I won’t comment further.”
But it is an occasion to reflect on what drives him to work so hard, with a rigorous travel schedule. “I absolutely adore what I am doing. People keep coming to us with new projects. I love to travel and I am getting to do what I enjoy. I believe it keeps me young.
“One is as old as one feels,” he said.
Traub is considered the consummate deal-maker, who thrives on the action. But for him, that’s not entirely what it’s about. “Creating something is more satisfying than doing the deal itself,” he said. “I have much curiosity. But when we execute, that’s really the satisfaction. Not when you make a deal.”
“He has more energy than anyone, including my son,” Murjani added. “And he has enormous curiosity about everything. When were in India, he explored every floor of every store we visited. Marvin doesn’t want to miss anything.”