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The Secret Of Giordano: ‘People Before Profits’

Who’s Who in Retail – RLI Meets
July 17, 2013
Giordano celebrates 20 years in the Middle East; Opens new generation flagship store
September 28, 2013

Ishwar Chugani, Managing Director, Giordano Middle East FZE

TII interviews Peter Lau, Chairman & Chief Executive of Giordano and Ishwar Chugani, Managing Director, Giordano Middle East FZE and learns that Giordano’s first franchisee in China, its biggest market today with 1300 stores, was an Indian company. Is it any surprise that the Middle East, India and Africa operations are led by an enterprising Desi from the Philippines?

Business breeds two kinds of successful people; the self-assured, swaggering, rags to riches type individual who is usually uninspiring, and the other who in my opinion, validates the best model of winning – the modest but unbeaten victor, whose ingenuity and resolve matches a genuine concern for the people he takes along with him on the road to notable success.

In turn, such a person role-models and reproduces the kind of team every company CEO probably dreams of having on his side.

Influencing people is one of the most unique powers we have, but it is not the same as using authority to control people, which is often the preferred option in the marketplace. The skill of communicating what you want to accomplish is essential though, if you want people to follow you.

Giordano, the global retailer of men’s, women’s and children’s quality apparel, is that kind of a company, because Dr. Peter Lau, its Chairman & Chief Executive and Ishwar Chugani, Managing Director, Giordano Middle East FZE, his point man in the region portray the kind of uncommon leadership acumen that is the hallmark of only a few companies.

Meeting them together on the Chairman’s recent visit to Dubai, and observing their easy camaraderie, it was obvious that good business depends on leaders with the right attitude and chemistry with their people and good listening skills. Despite its worldwide success, Giordano’s numero uno is a down to earth, lead-by-listening type of individual who is at ease with himself and everyone in his orbit. Peter Lau, 60, has been known to describe himself humbly as a man, “of limited talents.” One of his more illuminating quotes appeared in a Business Week interview when he disclosed: “Giordano is always treading in uncertain waters. I have no problem with that. I am comfortable living in a world of uncertainty.” He also pointed out, “When you look at the Giordano balance sheet, we have no debt. I promised myself that I would never let Giordano have any debt. I’m very distrustful of bankers. They are your best friends when you have money and your worst enemy when you are broke.”

(L-R) Ishwar Chugani, Peter Lau, Syed Salahuddin and Essa Al Ghurair

(L-R) Ishwar Chugani, Peter Lau, Syed Salahuddin and Essa Al Ghurair

When it comes to threats faced by the company, Lau admits, “My biggest worry is finding the right people with the right attitude, moral standing, and authentic leadership to carry out the vision of Giordano. There are temporary threats of course like high rental, competition and so forth. We have seen it all. It goes in cycles, after a while, these things normalize, but people are paramount.”

How does that play out at the top, and are these values for real? Peter Lau is very convincing, “the best part of my job is to interact with my colleagues, at a similar level or slightly lower level,” he reveals. “I try to transform them, and my success rate is probably about 10-15%. The process of transforming them or trying to transform our senior management is definitely the best part of my job,” he emphasizes.

‘People Before Profits,’ little wonder the Giordano success strategy is viable; one may argue that the world has changed from when the company first started out in 1981 in Hong Kong, but the steps to building a good business are still the same – people first, innovation, customer feedback and visibility, all traits that Giordano is well known for.

Ishwar Chugani elaborates: “We have one of the highest retention rates in the market, and over 70 per cent of our people have been with us for at least 10 years. We believe in promoting from within. We provide growth opportunities to our people whereby from a junior position one can grow to head a department or an entire market. It’s important that someone, who understands the brand, knows the management and the culture of the company, is given the opportunity to develop and take on bigger roles and responsibilities.” It was Ishwar who brought Giordano to the Gulf, taking it from relative obscurity to the household name it is today. Now one of the region’s fastest growing brands, Giordano has changed the face of apparel retailing – not so much in terms of trends, but by breaking down clothing to its basic elements and relevance.

Ishwar was born and raised in the Philippines, he graduated with an honors degree in Marketing and Management from De La Salle University. After running the largest family entertainment centre in Manila, he came to Dubai to conceptualize and launch Sindbad’s Wonderland family entertainment centre, launched by the ETA group in 1979 at the Al Ghurair Centre. Surprisingly he didn’t care for the retail business, Ishwar recalls, “I was going to be the fourth generation in my family running a store and I thought there was no freedom in that life.”

But he liked ETA’s ethos and family atmosphere, “The ETA approach is to empower you to take ownership and run the company as your own. In June 1980, we opened Sindbad’s Wonderland at the Al Ghurair Centre. When Mr. Syed Salahuddin my mentor and the Managing Director of the ETA Group suggested we look at expanding and diversifying our business, we acquired the Giordano agency for the UAE in 1993. And in 1995 we entered a joint venture with Giordano International to handle their business in the Middle East, North Africa, Eastern Europe, Central Asia and India. “Our strategy to structure individual business units – Saudi Arabia, U.A.E. Oman, Kuwait, Qatar and India, is key to our success,” he reveals.

 

In 2006, Ishwar was invited to be a part of Giordano International’s Management Committee and he is fully involved with the Group’s strategic planning as well as the day to day operations of the group’s business across the globe. 33 years later, the former darts champion is firmly in control as the Managing Director of Giordano in the entire region , operating 245 stores with plans for 300 stores by 2015. He is the only retailer on the advisory board of the Middle East Council of Shopping Centres.

“Brand Giordano is all about simplicity,” says Ishwar. “Our clothes are made of 100 per cent natural fabrics like cotton and linen for comfort. Styling is based on what is basic, relevant and functional. Our mission statement, ‘Feel good and look great’, in a way sums up its essence. The simplicity mantra extends to operations as well. I believe in the age old adage of keeping it simple.”

Peter Lau, Chairman of Giordano, with Ishwar Chugani and the team in Dubai

The company’s policy is to employ talented people from different backgrounds and 25 nationalities currently work with Ishwar and his core team in the region. “We recruit people more for their skills and abilities, preferring long term relationships that add value to the organization. You can tell who is coming in just for a job and who is interested in a career. There is a difference,” he points out.

Within Giordano, sharing knowledge and expertise is a unique part of the company’s culture. Open communication helps to engage and involve teams at different levels. “We also have something called a management operating team where each of us (directors) becomes the chairman of a country for a year. We look at the country assigned to us from the outside, visit once or twice a year, collect all the information and make an assessment. This helps us bring about change and growth, and it has worked very well with the group,” Ishwar observes.

Another important aspect that defines Giordano is that as a group, with 2,800 stores in 40 counties, they collectively review global trends and identify what is important. Once identified, store display strategies are decided and supported by global marketing and advertising initiatives.

Ishwar’s grandfather arrived in the Philippines in 1924, shaping the fate of the extended family, which now has over 300 members in the country. The rest of the family joined him in 1947. From Manila, they moved to Jolo, and finally to Bacolod City in 1955, where Ishwar was born.

“Culturally, I have acquired the best of both worlds – East and West,” says Ishwar, “the family structure and values from the East and the more relaxed natural way of dealing with people from an American culture which is more prominent in the Philippines.

“My grandfather and father taught me to honor the family name and walk a straight and narrow path; the most important values – to be honest and be patient. I don’t like wheeling and dealing in business. I like to be transparent and keep it simple. The father of Taoism, Lao-Tzu is credited with saying ‘when you are content to be simply yourself and don’t compare or compete, everybody will respect you.’ That’s how I am where I am today.

“Giordano has consistently grown over the past 20 years, employing over 750 people, I feel I’m still the same person. More enriched, but with my feet firmly on the ground. Next year, 2013, we will be celebrating 20 years of operations in the region,” he enthuses.

Ishwar readily admits his management style has changed over the years. “I used to be extremely hands on, very meticulous; I would open drawers and check – a fusspot. I’ve learnt that when I open a drawer in a store and it’s in a mess then the team is in a mess. Then I would check the sales figures and 99 per cent of the time I was right. I also used to have a chart – if there were two employees in a particular store I’d visit that store twice a month, a store with eight staff I’d visit eight times a month. I was too operational in my thinking. Now I have moved on, changed my thinking and have learned to delegate. It’s been a conscious decision to change. This way I can focus on strategic issues, grow the business and create new opportunities for my people.”

Obviously there are challenges, failures, and regrets when he looks back over two decades. “My biggest drawback is that I did not take advantage of the retail potential and bring in other brands earlier,” Ishwar feels. “My entire focus was Giordano and that’s why it is where it is today. In retrospect, I realize we could have brought in more brands, so we may have lost out on available market opportunities. Timing was of the essence. I thought we were only Giordano and didn’t want to do anything to affect our joint venture relationship, thinking we were more limited than we actually were. So, although Giordano grew to 245 stores, we could have entered with other brands and incubated the same way much earlier. This is my regret. But I guess it’s a personal thing, like deciding to have only one child so that you can give him or her the best…..”

True to the core of the Giordano philosophy – ‘World Without Strangers,’ Ishwar has no prejudice for any race .. “I have many friends from across all segments of society and because of this, I am able to manage different nationalities well. I am also easy to get along with, no airs or hang-ups in life.”

Frank Raj is TII’s founding editor.


Peter Lau, Ishwar Chugani & the Giordano team at the Dubai Mall store

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