Jobber Profile: Milan Clothing Inc.
An Interview with Sham Samtani
By Robert Nordstrom
When Sham Samtani, co-owner with partner Nand Mahbubani of Los Angeles-based jobbing company Milan Clothing, was getting ready to open the doors to his jobbing company in 2002, he searched long and hard for a company name that would reflect his sense of family and what it means to him both in his personal and business lives. He reflected upon his personal and family history, the temporary separations caused by business moves from Laos to India to Los Angeles over the past four decades, the ways in which his family had always found a way to come back together. Eventually, he drew a word out of his rich Indian culture and heritage.
Milan - in Hindu culture it means "to come together." For Sham it was the perfect name, both literally and figuratively, with which to honor his family and its history.
As Sham says about his decision, "Everyone who had been involved in our family's business, as far back as our days in Laos, had come together to form a new company - Milan Clothing."
From Laos to LA
Sham, who is 41 years old, was born in Laos, where his fathers (the plural is not a typo) and Nand Mahbubani owned a flooring business from 1962 - 1976.
"I have two dads," Sham says. "I have my natural father (Chellaram Samtani) and my uncle (Gulabrai Samtani) who legally adopted me and is also my dad. My fathers have been in business together since the beginning. Nand is their first cousin. They were in business together in India and they started the Los Angeles corporation together."
The Samtani's and Mahbubani's left Laos when it fell to communism and moved to India, where they opened an import/export flooring tile business as well as fabric and clothing business. In the early 1980s, Chellaram left India on a world tour to search for new location to open a business. He found that "perfect" location in Los Angeles, and in 1982 the Samtani and Mahbubani families moved to California to launch Bhave's International, an apparel retail corporation which eventually consisted of three stores.
From Retail to Jobbing
"I started working for my fathers immediately after high school," says Sham. "Our stores sold men's, ladies', and children's apparel. We bought our goods from the local market - domestic manufacturers and jobbers."
During the late 80s, however, retail slowed and Bhave's gradually closed stores. Eventually, the company was left with one store, out of which the families started wholesaling.
"It was a gradual process," says Sham. "We were still buying quantities in the market, and people were coming into the store and buying in bulk. We were supplying goods to retail outlets throughout the United States."
Bhave's International operated as a wholesale business until 1996.
In 2002, Sham, who had been working for a consolidating company since 1996, opened Milan Clothing. When Nand joined Sham as a partner in 2004, the milan circle of family and friends joined together was complete.
A Young and Growing Company
Today, Milan Clothing employs over 35 staff in the U.S. and overseas. The company operates offices and warehouses in eight countries throughout Southeast Asia, with plans to open two more offices in Bangladesh and Pakistan in 2008. Milan opened a New York sales office in January 2008.
Milan Clothing's goal is to be a one-stop shop for its customers. While the company carries men's, women's, and children's clothing, its forte has been children's wear from the beginning.
"As we move forward," Sham says, "we're adding a broader range of categories. Percentage wise, we carry about 70% kids, 20% men's, and 10% women's, but our men's and women's categories are growing tremendously for us."
In the kids' area, Milan is set oriented, carrying infant to girls size 14 and boys size 18. Denim is its strongest category in men's although the company also carries a lot of polo style shirts. The women's area is missy and plus-size oriented, mostly geared toward tops.
"We're very heavy into school uniforms," says Sham. "That's an area that's been growing for us throughout the country. We also produce scrubs. We're able to play with the styles to make them a little more fashion oriented."
Overseas Sourcing Strategies
In the beginning, Sham, who does all of the buying for the company, sourced goods primarily from the local market. As the new business on the block, however, he found that he was being offered goods after they had already been through several retailers and jobbers.
"We knew we needed to change our strategy so we could be the first to see a particular lot," Sham says. "But the only way we could do that was to start sourcing goods overseas. Before Nand joined me as a partner in 2004, we were just jobbing lots locally. I'd pick up goods from a jobber or a manufacturer and flip them to a retailer - quick turnovers to create capital."
Nand's overseas contacts helped the company grow and expand. The overseas offices and warehouses allows the company to buy and hold goods through opposite seasons. Overseas warehouse staff pack and ready the goods the way customers want to receive them.
"We keep our overhead down by warehousing overseas and then bringing the goods into the U.S. just before the season. Labor and rent costs are much better for us and the economies of both countries are supported. We have an agent in each country who manages the staff and sends me reports on a daily basis. We talk regularly."
While Nand manages the day-to-day operational activities of Milan, as well as the company's import/export and warehouse operations, Sham handles the overseas buying and sales.
"I have a sales team of four, headed up by Sheryl Anne Paras. I depend on my sales staff for my buying decisions," Sham emphasizes. "They have the regular interactions with our customers, and I feel their input is very important."
New Strategies for New Situations
In 2004, when Milan began sourcing goods heavily from overseas markets, Sham ran into another problem when he discovered that his competition was not other jobbers, as was the case when sourcing in the U.S., but rather the retail industries of the particular country he was sourcing from.
"We found that the retail industries of the countries we were buying from were so strong that they were outbidding us. The factories favored selling to them because they were able to get higher prices, number one, and they didn�t have the documentation headaches."
To overcome this problem, Milan moved into off-price manufacturing, wherein they bought fabric overruns and cancellations from factories and cut it into trendy styles.
As a result, Milan was able to maintain a steady flow of goods at low price points.
The move into off-price production has worked out well for the company and the factories. "The local markets wanted ready goods. The factories liked us because we were willing to buy up fabric that the local market couldn't handle. It created an opportunity for us to give our customers consistent goods at low prices and helped the factories by giving them work during their downtimes. It's still off price in the sense that we're buying fabric at 50%, 60%, 70% off the factory's line price."
Today, Milan runs a 50/50 ratio of jobbed versus budget manufactured product.
To serve its growing customer base, Milan plans to continue to seek new sources of jobbed goods as well as expand its budget manufacturing. In addition to catering to the major discount and off-price chains, the company serves small and medium size retail operations throughout the United States and into Canada and Mexico. Milan also employs a sales person dedicated to the Los Angeles garment district.
"We approach our customers with total honesty," Sham says. "We give them a true picture of the item - what they see is what they get. We stand behind our product 100%. No questions asked. Our customers are assured of getting quality pre-packed goods with good color and size assortments."
In the past two years, Milan has focused a lot of attention on its Internet sales (www.milanclothinginc.com), selling to the small boutiques in small towns, the retail owners who find it difficult to get away from their stores.
Sham says, "While some jobbers won't break up packs for their customers, we'll break packs and sell small quantities for anyone. Internet sales is a growing area that we want to continue to develop."
Milan Clothing has been exhibiting at the Off-Price Specialist Show since it opened its doors in 2002. According to Sham, the company's growth - a steady 15% - 20% annually since opening its doors in 2002 - is directly attributable to its participation in the Show.
"The Show helps us grow new accounts and establish better relationships with our existing customers. We've done other trade shows in the past, but none of them compares with what the Off-Price Show has given us in terms of growth opportunities. I love working with the Show staff. They take care of us."
When It All Comes Together
Although Sham's fathers are retired now, Sham still consults with them daily, which is easy to do since they both live with him, his wife and their two children.
"I keep them informed," Sham says proudly. "They still advise me. I want them always to be a part of this organization."
One could say that the milan in Milan Clothing is alive and working well for the Samtani and Mahbubani families.
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