Did Big Textile’s retail pivot work?

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Consider this picture: the year is 2010. You are the owner of a large textile company in Pakistan, based in Landhi, in Karachi. You face eight hours of power outages every day, but even that’s better than your counterparts in Punjab, where it gets to 12 hours a day or worse. Your factories cannot run like this. Textile manufacturing is a continuous process that needs to keep running smoothly, or else you have to start all over again, which can be extremely costly. And that is if you are lucky and your machines do not start breaking down.

At your desk in your office next to the factory floor, you are staring at that order that you worked so hard to get from Gap in the United States, but now will miss the Christmas deadline for because you have no idea how long it will take to make the clothes given how much your machines have to keep shutting down because of the power outages.

Great. Your engineering manager just came in and told you that what you thought was going to happen has happened: some of your machines have broken down. That is hundreds of thousands, if not millions of dollars in damages, plus reduced capacity for weeks, if not even longer. Oh, and the electricity in the factory and your office just went out again. For the sixth time today.

How can anyone possibly make any money in the textile business?

On your drive home from work, you are thinking about what some of your friends in the textile business have told you about Bangladesh. How the European Union has just granted them preferential tariff access and how the electricity situation there is supposedly a lot better. Some of them have been talking about relocating their factories there, or at least setting up new ones. It is a thought that goes through your head all the time. “Maybe this country just isn’t the place for a textile manufacturer,” you think.

You live in DHA Phase 5, and that is a straight, if somewhat long, drive from Landhi, but you are so stressed that you do not feel like going home right away, so you decide to drive around a bit. You find yourself around Clifton. You drive past Ocean Tower, that new building that is coming up. Right next to it is a wedding hall, but then you notice something. There is a huge crowd around there, but it is not a wedding. It looks like a large number of people – clearly mostly upper middle class – lining up to buy lawn clothing. You remember hearing something about a Sana Safinaz sale today, and think this line probably has something to do with that.

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“Hmm… maybe somebody is making money in textiles in Pakistan after all,” you think to yourself.

Then the idea hits you like a ton of bricks and you curse yourself for not having thought of it sooner: why are you not making the clothes that these people would line up for? You are in the clothing business. You have a massive factory that can take ginned cotton and churn out beautiful clothing good enough to be worn by middle-income consumers in the United States and Europe. What is to stop you from selling to middle-income Pakistanis?

 

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