Saturday, October 31, 2009

Princess Diaries

Shahnaz Husain converted her teenage passion into a thriving beauty business. Now she must let it move on beyond her
by Elizabeth Flock | Sep 29, 2009

Read it at Forbes

Shahnaz Husain is larger than life. And that has been the beauty secret of her brand of Ayurvedic products that promises to not only care but also cure. It’s not just the imposing figure she cuts, with her sweeping Louis Vuitton robes, lion mane of hennaed hair and the massive diamond studding her nose. It’s not just the bowing servants calling her Princess, the house decorations fit for royalty and the photographer and videographer trailing her at all times. It’s the fact that at 65, Husain is still spending 20 hours a day rushing from press conference to factory to office to press conference again (often in other countries) with the same gusto and conviction, despite the younger generation clawing to take over.

“If it bears my name, it catches on,” says Husain, the lady who turned her teenage passion into a Rs. 250 crore a year company, Shahnaz Husain Herbals (SHH). Today, branded Ayurvedic products are dime a dozen, but in 1970, Husain was the first to take age-old beauty treatments largely practiced at home, and sell them across the counter. Over the past four decades, she has franchised out 400 beauty parlours where well-heeled women gather for beauty treatments made from extracts of diamond, gold and rose petals.

“If it bears my name, it catches on,” says Husain, the lady who turned her teenage passion into a Rs. 250 crore a year company

She never advertised but made sure no product went without her face. SHH expanded to more than 100 countries as a result of Husain’s constant wooing of the media around the world.
But today, after being synonymous with beauty care for four decades, Husain’s business is showing signs of greying. The things that made SHH work — niche, expensive, unadvertised brand — might now be the chinks in its armour.

On the one hand, international brands such as Clarins, The Body Shop and L’Oreal are taking away the attention of the younger generation. On the other, beauty treatment has spread beyond the elite and embraced the mass market. But SHH has stuck to the formula it developed in the 1970s and 1980s. Its old world charm is not able to attract new-age customers. Ask Husain about it and she brushes off her competitors: “We don’t have any competitors. Dabur is into health. Clarins doesn’t do cures. No one does cures but us.”

But her salons in Delhi are populated by ageing women who are ever in need of her anti-wrinkle cream, and are noticeably absent of teens who might use her kajal. “The company is losing its sheen, whether Shahnaz is around or not. There are now so many mass market products and so many options. It needs a more focussed way of getting to the consumer,” says Sonam Udasi, vice president, research and group head - consumers at Brics Securities.

The Right Mix
In 1958, when Husain got engaged, she was all of 14. By 16, she had her daughter. The young mother was quite bored and wanted to do something new. “Mr. Husain was posted far away. So I started mixing in my house…” For about 10 years, she ran the business informally from home. But when she saw the success of a friend’s parlour, which she had help set up, she wondered why she couldn’t do the same.

In 1970, she opened a small salon in Delhi. Funding was not a problem as she came from an illustrious family. “My father and grandfather were chief justices. On my mother’s side they were commander-in-chiefs,” says Husain. But it was not the money that made it work; it was the idea of branding Ayurveda. The potions she had concocted at home established her as one of the most well-known brands in India. That was the situation until now.

But Husain is ageing and may not have all the answers to the company’s problems in the future. She must find a successor to carry on after her. Unfortunately, her son Sameer who could have inherited the business, died last year. Husain isn’t willing to discuss her alternatives. “I’ve had no thought of teaching or planning a takeover,” says Husain.

What she does not say is that the company is already able to operate without her. Ever so slowly, Husain has — unwittingly or not — primed more than a few people to be able to take over and they are bucking at the reins to do so. They are already changing the face of SHH, perhaps for the better.
At first glance, the likely heiress is her daughter Nelofar Currimbhoy, president of SHH, who sports a similar lioness head of hair, husky voice, and glamourous animal print clothing. Currimbhoy, who handles local distribution, business expansion and research and development, grew up knowing just her mother’s business.

“I can’t think of a point when I joined the business. I was born and will melt away into Shahnaz Husain Herbals,” she says. Currimbhoy has made significant contributions to the company, such as conceptualising three of Shahnaz’s most popular lines — gold, pearl, and flower power. But she admits she doesn’t have the same fervour as her mother. Nor does Currimbhoy have the star power her mother has.

While Shahnaz Hussain does not declare her grandson as heir Sharik Currimbhoy says,
Image: Amit Verma
While Shahnaz Hussain does not declare her grandson as heir Sharik Currimbhoy says, "Well, I am the inheritor."
Chips off the Old Block
But there was someone else who would have been the successor to SHH and was in many ways Husain’s own facsimile. Sameer, Husain’s son, was a relatively well-known rapper and loved the limelight as much as his mother. Though Sameer Dada was “very much into becoming the next Michael Jackson,” according to Husain, that was just a hobby in comparison to his dedication as president of the company. But in January 2008, Sameer died after falling from the third floor of his in-laws’ flat in Patna.

A law suit was never settled over whether Sameer had jumped to his death or was pushed.
There is one more member of the Husain family who can hold the limelight. “My mother works only by instinct. Some people just have the business instinct. I don’t,” says Currimbhoy. “My son does.”
When asked about her succession plan, Husain does not mention her grandson. But it is clear the 28-year-old is already very much in charge. One of the first sentences out of Sharik Currimbhoy’s mouth is, “Well, I am the inheritor.” The mix of pride and fearlessness is the same as his grandmother’s. It’s also clear he is the only one who can turn around the company.

After studying at Columbia University in New York, Sharik started an infotech company. After selling the company in 2003, Sharik came back to India in search of something else. “One day I was sitting with my grandmother and she said ‘why don’t you take over the franchisees?’ I thought, why not? I’ll do that to keep myself busy and decide what I want to do next. But then I found out I was really good at what I was doing like selling things to people.”

Sharik didn’t just take over the franchisees. He also took over the entire export business, hiring, marketing and pricing. Husain does concede this much: “He has new ideas all the time, and the ideas are visionary. He is a tomorrow child.”

For one, Sharik overhauled pricing internationally. When he started, SHH was pricing products the same in every country and a shop would mark it up however it liked. Now, Sharik looks at the end price and works backwards, so that a product is not sold for the same price in the Middle East as it is in the UK.

Sharik has other ideas that go directly against the SHH modus operandi. One such idea is to take the niche brand mass-market. But, Husain insists this was her idea. Two years ago, she claims, a girl chased her down in Delhi, nearly killing herself running across traffic. “She wanted my autograph and I said do you use Shahnaz? She said no, it’s too expensive. And from that moment on, I decided to do mass marketed products, to make products for her.”

Old ways of mixing by hand will give way to automated processes at SSH
Image: Amit Verma
Old ways of mixing by hand will give way to automated processes at SSH
But over the last two years that product line hasn’t come out. “We’ve been hearing rumours about Shahnaz Husain Herbals going mass market for years,” says Vikas Mittal, vice president of marketing, at Dabur India.

Sharik seems to have finally pushed that line into completion and is expected to release by the end of this year under the name Shahnaz Forever. (The international version has already launched).
Consumer product analysts think the mass market is just what SHH needs. “The only way for them to grow, whether Shahnaz is the anchor or not, is to tie up with a partner, or go mass market,” says Udasi of Brics Securities.

Udasi also thinks SHH should tie up with a mid-tier FMCG company in India, so it can utilise the partners’ distribution line up and get much better margins. SHH has no plans for such a large-scale partnership domestically, although it has 400 distribution partners, through which 90 percent of its products are sold. Sharik has also pushed through key partnerships internationally, such as renewing a partnership with the New Medical Center, one of the biggest FMCGs in the Middle East.

Changes in the DNA
SHH became a talking point at Harvard Business School many years ago when professors were wowed by the fact that it did not advertise. “I was invited to speak at Harvard. They say you violate every norm we teach. They say you need a certain amount of money to launch. We have made a huge brand [which is] internationally recognised without any advertising at all. I just call the press,” laughs Husain.
But both Sharik and his mother have decided it’s time to make a change in Husain’s no-advertising mantra. The new Shahnaz Forever line will be fully advertised. “I don’t think in a business there should be a rule forever,” says Currimbhoy.

Sharik also has long-term plans for diversification. He gives the example of Dabur, which started out in healthcare but later expanded into other businesses. “Twenty years down, we might even own a power plant,” he says, laughing — that is, if his grandmom lets him have his say.

Things are changing at SHH’s factories too. The 150-employee Noida factory is semi-automatic, because Husain insists that she’s “selling civilisation in a jar” and because she wants more employment, says the factor’s manager, Javed Iqbal. One employee even manually adds rose petals slowly to a mix. Iqbal says, “If I had a chance, I would remove half the guys working here for the last 15-20 years. They aren’t needed.” At the manual machines, 3,000 products are made in eight hours. Iqbal points to the fully automatic machine line, and grins, “Twelve thousand products are finished on this line in eight hours.” The new SHH factory in Roorkey will have just 100 employees but three-four times the production level of the Noida plant because it will be fully automatic.

Husain isn’t unhappy about the changes. “He [Sharik] hasn’t changed things. He has just combined my vision with his vision. I’ve never said no to him for anything he wants to do. I pay the price, the next generation bears the fruit.”

After Shahnaz
SHH is sure to change after the enigma of Shahnaz Husain is gone. But Currimbhoy is confident the company won’t miss a step, as it is no longer as much about the magnetism of her mother as it is the strength of their products.

Others disagree. “It’s been difficult for any new entrant to the mass market in recent years. Distribution channels are a problem, getting to the younger generation is a problem. I have doubts that they can be successful,” says Udasi. Sanjeev Malhotra, managing director, Alia Group, which represents SHH, agrees that distribution will be a challenge, especially in rural areas. But he thinks the company is in a sweet spot because of the loyal customer base and addition of new distribution partners.

When you ask Shahnaz if the company will go on after she is gone, she sighs. “Well, nothing lasts forever. But a company goes on. If the roots are strong, it might stagger, but it will go on.”

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