The concept of Men’s Store was revolutionary. Housing the world’s top designers’ latest collections under one roof 15 years ago in Pakistan, wasn’t what could be termed as commonplace. Belonging to a multi-generational business family who were among the pioneers of retail in the subcontinent, Asim Buksh wanted to do something different. In a way, it could be termed as his legacy, as Asim’s grandfather Haji Karim Buksh had revolutionised the cloth and tailoring business back in 1927, in Calcutta (which later expanded into the retail chain HKB in 1948 and the Buksh Group in the decades to come).
After having completed his MBA from LUMS in 1993, Asim joined the family business with a vision to enter the relatively unexplored area of luxury services in Pakistan. Men’s Store, today, has exclusive representation of over 22 brands, including Gucci, Etro, Armani, Hugo Boss, Christian Dior, Dolce & Gabbana and Chaumet in all the three major cities of Pakistan. Not stopping there, the Buksh Group has diversified its portfolio to represent exclusive international luxury automotive, fashion, technology, jewellery, cosmetics and lifestyle brands that include Jaguar, Bentley, Land Rover, Bang & Olufsen, Red Earth Cosmetics, Swatch, Exist, etc.
Being the CEO of Buksh Group, Asim has a vision that extends beyond providing luxury items to a niche clientele. With the ideals of corporate social responsibility in mind, the Buksh Group has recently established a microfinance institution, Buksh Foundation, with the aim to alleviate poverty and to provide financial access to the rural areas of the country; and Buksh Energy, which seeks to provide alternate energy solutions in the rural and urban areas of the country.
The Buksh Group continues to expand and grow under Asim’s enterprising vision. Asim chats with Blue Chip about his entrepreneurial journey over the last two decades and what is yet to come
You come from a family that has been in the retail business for a very long time. When you started off, did you come in with new ideas or did you want to carry on with the same legacy? What was your frame of mind when you started off?
Asim Buksh: “I was very clear that I wanted to be part of the business. In 1993, I graduated from LUMS but before that, off and on, I was working. Actually, I was 15 years old when I went to the store – I used to run a grocery till and also used to do some buying. So, I was very clear that this is what I wanted to do. It’s not that somebody told me to do it; it was my own choice.
It was a middle market grocery and retail business. I enjoyed it. I still love going to a grocery store and every time I go to a grocery store, I think I should have done this. But, at that point I made a decision that, no, this is really not for me and rather than selling a 100 items at Rs. 10 each, I would sell one item which costs Rs. 100,000. I also used to travel a lot, so I figured that the designer brands that are available all over the world… how can it be that they won’t sell in Pakistan? It was basic and simple common sense and I thought let’s do this.
In December ’93, I came back from McGill as an exchange student and joined in January. About six months into the year, I realised that this is how I need to change it and, hence, on January 5, 1995, Men’s Store was born – it was operational by then. That’s how it started and I always had these dreams of grandeur, of immortality.”
You didn’t face any resistance from your family that this is how things have been for so long and you’re coming in with all these new ideas?
AB: “There was resistance, but I can be very thick skinned! When I want something, I want something – it’s just that simple. It makes absolutely no difference what someone is saying. With time, even they realised that if one has faith and belief in their dreams, that change is the only constant.”
What kind of reaction did you get initially when you went abroad for buying merchandise for Men’s Store?
AB: “My first meeting at Armani was for less than 60 seconds. I walked in there and I told them this is what I want. I sat, and a few minutes later, this woman came out and I said this is what I want to do and she said ‘no, thank you’. That woman’s a very good friend of mine now. But, there were several meetings like that. Then, we put together this store and I took pictures of the store and they couldn’t believe that this was actually a store in Pakistan because at that time when we did it, it was very avant-garde. That obviously helped a lot.
There were a lot of incidents like these but then people started looking at what we were doing and one or two people agreed that ‘okay, let’s do it!’, so that kind of got the ball rolling.”
Wasn’t there anyone else doing something similar in Lahore at that time? I remember there being a couple of stores that sold designer wear that were frequented by high-end customers.
AB: “There was a whole market in the basement of a building in Liberty Market which sold imported men’s shoes and clothing. What we do is very different from what’s called internationally as the ‘suitcase’ business or the ‘gray market’ business. For instance, a person goes to, let’s say, London and he goes to a store and tells the person there that you sell me these things and I’ll take it from you on a discount – or you give me the goods that are on sale.
When our team goes… they were there in end of May and were ordering for the Spring/Summer 2010 collection, so what is going to be in stores internationally worldwide in January-February 2010, we have ordered now – as does the rest of the world. We are the only people in this country who represent these brands officially. Everything else that you see in the market is gray business. In that, things like sizes, quality, old season stuff, the right collection etc. come into play. Our market is a bit more specific, so if you get stuff from an Italian store, there are some issues with it and if you get it from America – that has its separate issues. The collection has to be market specific and when you do the gray market business, it cannot be a market specific collection. A lot of places like these have shut down because of us – because we were providing the right thing, at the right price, at the right time. Even now, if some are operational, so what? Their outlet may be 2000 sq. feet – we now have 15,000-16,000 sq. feet and in 2010, we are looking to take it up to 50,000 sq. feet. So, they are inconsequential as far as we are concerned.”
You’re talking about plans of expanding. With the economic situation, is it a good idea to expand right now and do you think there is still a bigger market out there that you’re going to cater to with a bigger place?
AB: “Yes, there is. The fact that the economic situation or the much sought-after financial crisis has had an impact on the target market that seeks to indulge in luxury every now and then, is an illusion. 20% of our richest families still travel abroad to seek the brands that are not represented in our store, the opportunity is huge to cater to those unmet desires and also expand into luxury goods in the cosmetics, skincare and fragrances market. The luxury will indefinitely grow as the products we offer are a want rather than a need.”
And your sales haven’t been affected as such?
AB: “Not at all. Just recently we launched Rock and Republic in our stores and the response has been overwhelming.”
How come?
AB: “The domestic economy of Pakistan is $180 billion, which effectively means that we do $180 billion of business as a country – that’s the kind of money that’s changing hands. This is the official figure. Then, there is the undocumented economy which is probably approximately the same size. So, our actual GDP is around $250-$300 billion. That’s a large enough pie. People don’t look at these things and they go with what the print media says to sell papers and what the electronic media says to sell air time. No one has any rational thinking behind anything – if we are saying that the economy is down, on what basis is it down and why? If textiles are suffering… they made so much money in the past 15 years, why didn’t they pre-empt that when GAT would be finished what would China do with them, and in order to upgrade themselves what should be done? Why didn’t anyone think of that? Now, if someone didn’t think of it then, they put it on external factors that this is why that happened, etc. When I started Men’s Store, I had very clear thinking that, okay, right now there is a duties issue but GAT is going to come in and when that happens, trade is going to be free so there won’t be any such issues or hassles anymore. Also, in 1993, I thought that eventually the big boys of grocery are going to come into this country, so either we need to have the financial muscle (which, at that time, we did not) to compete with those boys or we move on and do something that we can do easily.
I had the understanding of all the right brands. I went out and talked to the brands, got them interested and got them in, and now, we are virtually a monopoly because we did it before anyone else could have even thought of it. So, if at that time, I had not thought of this and I had still been doing a small-time grocery business, and when these big boys would come in and what’s happening with the grocery businesses now would have happened to me, I would have complained that Pakistan’s economy is not suitable?”
The Buksh Group launched Land Rover and Jaguar some time back. Are the sales satisfactory?
AB: “People have the money. It is just that first, they were importing these cars and now, they have a local authorised dealer to work with, which gives them the added benefit of after sales and maintenance.”
I haven’t really seen many Jaguars out on the roads…
AB: “Few. You’ve mostly seen the Range Rovers because when we launched Jaguar in November is when the duties had gone up. From 131% to 213% – now, that does impact the business. That impacts everything. It is because of inconsistent government policies. Till the Musharraf government was in place, there was a clear policy that over the next five years, the duties are going to go from this much to that much; so, one planned and invested accordingly. These people came. They first raised the duties (for the 2008 budget) and then, in August, they put a regulatory duty of 50%; effectively they went from 131% to 213%. How do you account for something like that? How do you plan for it? I think the only thing we need from our government is to stay clear. We were going to launch Bentley this year but we’re going to do it next year.”
You mentioned earlier that you’re planning to expand Men’s Store. Are there any plans of giving space to Pakistani designers under the same roof?
AB: “We are looking to expand substantially but in our business model, there is no place for that. We are looking towards skincare, cosmetics lines, home fragrances, candles, high-end house ware, crockery, cutlery, table ware, tumblers, etc. We don’t get these kinds of things anywhere over here. So, we are more focused on that. It’s simply a business decision and has nothing to do with anything else.”
Recently, you’ve launched the Buksh Foundation as well. How did the idea for microfinance come about?
AB: “Well, the idea actually was more along the lines of eventually looking at a banking license. The unbanked is an arena – a sandbox – where you play. It has a massive social impact. The foundation is a stepping stone in that direction. Once we have that, which we do now – it’s operational – we are going to look towards apply for a banking license in microfinance towards the end of the year. We are also looking to invest in energy, which is Buksh Energy. Basically, there are these 50-60 million people who have absolutely nothing. They don’t have credit, energy, clean water, services, education – they have nothing. More importantly, they are still spending the money but highly inefficiently. The poverty factor is extremely high. You would be surprised that when we use energy, or electricity, it is cheaper for us to use it than it is for the poor – around 30-50 times cheaper for us. They buy kerosene oil which is a highly inefficient way of getting heat/light and it costs more on a per hour/per unit basis – however you want to calculate it – versus WAPDA giving us energy. It is very expensive to be poor. Now, if we can take 20% of their energy budget from their overall household budget (however small or big) and provide them with efficient ways of energy and they can pay us back through micro credit… for example, a small solar solution for, lets say, $100 which lights up a room or two and a fan. Right now, they are burning kerosene oil and don’t even have the option of a fan. We replace that with our solar solution and it gets paid off in 60-70 weeks and has a life of 20 years. After that, their income goes up and they have now acquired an asset which allows them to be a lot more productive and they can use that money on maybe education or on health.”
Are these two projects connected?
AB: “Yes, they are. We’re going to be investing and impacting businesses across the board. There’s going to be a health business. There is already an energy business and the next one is water. Clean water. There’s going to be all of these businesses and they are going to be targetted towards these people who don’t have anything. If we can raise the income level of these 50-60 million people even by a few percentage points, it can have a huge positive impact on the country. So, what started off as a banking license is now more of a mission.”
While talking about Buksh Energy, you spoke of solar lights. Is there anything else?
AB: “In energy, we are looking to do lots and lots of things. There is a huge agriculture initiative that we are looking at. We are trying to understand what is happening in the agriculture sector. Once we have understood that, we are going to look at how we can add productivity to it. Punjab alone has 850,000 tube wells. Out of those 850,000 tube wells, about 98% are privately owned, which is about 800,000 tube wells. Out of those 800,000 tube wells, 750,000 are run on diesel fuel which is a highly inefficient way of getting water. People are using tractors to get that water, they’re using peter pumps and diesel generators. We want to put solar panels on these tube wells. That, in itself, has a huge impact. In two and half to three years’ time, there is a payback on solar versus diesel generation. Imagine, once that happens… because a major chunk of the farmer’s income goes into maintaining a tube well because without water he can’t do anything. So, once this happens the farmer’s income will be higher and the productivity will be higher. We will also help them micro lease through the Buksh Foundation as it will be hard for them to buy a panel worth Rs. 300,000. There is a huge opportunity. Don’t get me wrong, it is a huge opportunity to make money, but having said that, it is a huge opportunity to do lots of good as well.
Within the Energy company, what started as an ‘Energy Credit’ for the rural microfinance clients has now mushroomed into a fully fledged ESCO business targetting the commercial, industrial, domestic and agricultural clients. Pioneering in this arena, we are introducing the concept of energy conservation and energy management, resulting in millions of financial savings to the client and Kilo Watts of energy savings to the national Grid. This recently established business has already attracted a significant client base. With the first few leaders in energy conservation, we are sure to create an exemplary model of demand side conservation and supply side generation meeting the impeding energy demands of the country.”
Are there specific areas that you are focusing on?
AB: “We’re starting with Punjab. Aside from rural energy, we are also doing commercial projects. There are lots of educational institutions that we are talking to – to change their electricity generation to solar. For example – most houses have UPSs which run for an hour when the power goes out, so we can do a solar panel where it can bear a greater load than a UPS and can run for at least eight hours.
Similarly, within our ESCO business we are most interested in hospitals, schools, universities, commercial building and small-scale industries as there exists ample opportunities for conserving energy consumption and bringing power loads down by 20- 30% resulting in tremendous financial savings for the client. This is again a new business model, running successfully on a global scale and introduced by Buksh Energy in the energy-critical Pakistan.”
What kind of challenges have you faced along the way?
AB: “We are limited by our own thinking. We can put as many challenges and limitations on ourselves as we want. Or, we can remove these from our thinking – that is also in our control. Of course, there are small impediments and things happen. For example, when we needed the SECP license for the Foundation, I thought it should take about a week. It took 3-4 months and we are told that we were lucky to get it in 3-4 months because it takes up to a year.”
What are you passionate about?
AB: “I am very passionate about myself, meaning that I am very passionate about what I want to achieve in life and as I said, immortality – for me – is something I really want to work towards. The pharaohs say that to speak of the dead is to make them live again. They were dead 3000 years ago and we still talk about them – so, that’s immortality.”
The success that you have achieved so far – has it surpassed your expectations or you think there’s still a lot more to be done?
AB: “I think this is just the beginning. What we have achieved over the last 10-12 years is going to dwarf compared to what we are going to do in the next few.”
So, in your opinion, there is no bad time for anything? You’re just going out there and doing it regardless of the security or political situation, etc.
AB: “See, there are certain things that we can influence and there are certain things we can’t. We can either work on the things that we can influence, or we can just sit and worry about the things that we can’t. So, either we go out and do something – that’s fine. If you’re not going to do that, then what is the point in sitting and talking about it in a drawing room or worrying about it? I don’t watch TV and I don’t read newspapers. I am interested in business – so I read business books or I’ll read the New York Times or something like that occasionally.”
Would you consider yourself a workaholic?
AB: “No. I quite like enjoying my life. I like travelling and meeting new people so I do that a lot. I like cars. I like fashion. I’ve created businesses around me which I’ve always enjoyed. What more fun than to wake up in the morning and decide which car to drive? I’ve lived in Milan almost six months a year for the last 10-12 years. That’s fun.”
What would you consider the factors of your success?
AB: “Perseverance, self belief and absolute faith!”
