The Story of Landmark bookstores in India

MY STORY SESSION featuring MS. HEMU RAMAIAH, CEO – LANDMARK

(Inspirational stories of successes & challenges faced by entrepreneurs as told by them)

TiE Chennai brings practitioners & champions of Entrepreneurship in its monthly sessions. Recently, it brought out this session (29/06/2007) by the 2003 Women Entrepreneur of the Year, Ms Hemu Ramaiah. Hemu Ramaiah, who needs little introduction, shared her truly inspirational entrepreneurial journey, especially the challenges & triumphs in setting up one of the leading and famous bookstores in India – LANDMARK.

Given below are my notes taken during the session, which are not official transcripts. They also capture only the points I noted down and are not in their entirety.

• Ms Hemu’s first job was in a boutique bookstore in a 5-star hotel, and there she worked for several years. While working there, she felt that the book collections there could be better.
• On that idea was born Landmark in Chennai. Coming from a conservative family she didn’t borrow initially for a long time and banks’ didn’t provide easy money like today.
• Got some seed money from her brother in 1987 for about 6 lakhs, and when he sold his stake to Tata’s recently, he made INR 104 crores from that!
• During the 1991 Forex crisis in India, Landmark made a bold move and bought all foreign titles from around India. Basically sucking the available titles. People who looked for these titles ended up knowing Landmark and came here to buy these books, as they were available only here.
• Initially, Landmark had problems with the foreign book distributors in India, who were reluctant and not cooperative in supplying to them. So they started their own distributorship firm, Westland. Today, WestLand supplies to 1800 stores.
• In Coimbatore, they started and tried their franchise. It was a bad idea due to a lack of control over quality and store management. In Manufacturing, Hema believes a franchise might work, but in Book Stores, where you don’t own the product, the Franchise model will not work.
• In 1999 was the first Joint Venture (JV) in Kolkata. They took a 3rd floor in a side street, not a good idea!
• In 2000, there was an Internet website with SIFY. Spend about INR 7 lakhs
• Bought the space where Landmark is today in the Spencer building. Didn’t rent it, but it proved to be a good move.
• Built a bigger back office, forced processes.
• Each store was different and sported young Interiors. Spencer’s store became the anchor stall. 70% of traffic in a mall comes to an anchor store. Bangalore Koramangla store was rented.
• Rewrote their entire backend Software with Network connectivity.
• With all these activities, the question was, on How do you end the business? What is the succession plan?. We were in Crossroads.
• So, identified a partner who can buy equity and who has a synergy with Landmark’s idea and concept. Kind of a cultural fit. Sold 76% equity to Trent, a Tata Sons company that runs WestSide stores, in August 2005. This gave protection of brand, staff welfare assured and a Cultural fit. Corporate environment. In 18 years, Landmark built 3 stores. In 2 years post equity sales, they built 6 stores, and many more are in the pipeline.
• This provided them the opportunity to own the entire chain, especially with their distributorship,p and now Landmark is into publishing as well. Used the Tata Network to get premium mall positions, pay market salary. The idea is to become the No.1 bookseller in India.
• Entered into a tie-up with the Taj Group of hotels to open many boutique book stores in the coming months

Other points:

• 80% sales came from old books
• In India, pure book stores won’t work from a commercial angle. Book buying has to be made into a shopping experience for the whole family. So a multi-product store format works, which provides Pure entertainment for the entire family. Margins-wise, books might still do the best.
• A good booklover is likely to be a good music lover, but vice versa may not be true
• Vernacular Titles are still a niche in India. Today, Price and Margin are very thin in these titles; these publishers are very conservative. Once Price picks up, there is scope for them.
• Today, a book Customer is 20 times more informed than the seller because of the Internet and Media.
• As you read more, you realise you know less. Hema still reads vigorously every day.
• The INTERNET has actually increased the scope for book stores. You research on the Internet and buy it from a bookstore. Landmark recommends was a mailer that worked well.
• In England, they tear the last 3 pages and throw the books after they read them, so that no one can read the ending.
• Landmark is going to get into the library rental
• Being a Women entrepreneur has been easier and opened many doors for her.
• I found the Tata story of the acquisition here.

I have recorded my notes taken during the session as a PDF document (352.53 KB)