Universal Sportsbiz: It's all in the game

 
As a school student in Hyderabad, Anjana Reddy led a frenzied life. The eldest child of Vinayak Ravi Reddy, the vice chairman of family-run media house Deccan Chronicle Holdings, she was an aspiring badminton player who spent six months playing in tournaments around the country. When at home, she would be “up by 4 am, be at the court by 5, head to school by 7.30, and head back to the stadium by 3 when school would get over”. Then, when she was in Class 10, she had a burnout. “My shoulder, legs, everything were giving away,” she says. Forced to quit badminton, she focussed on academics, but her love for sports never quite waned.

 In 2011, Reddy, now 29, returned to India from the US with a bachelor’s degree in accountancy from Purdue University, and a master’s in corporate finance and asset management from the University of Illinois at Urbana-Champaign. Getting into business was an obvious choice, given her lineage (her mother Shanthi Reddy, too, runs RL Fashions that manufactures surgical masks and caps), but Reddy showed her appetite for risk when she shied away from the family businesses and decided to take an independent entrepreneurial plunge. In early 2012, she started her own company, Universal Sportsbiz Private Ltd (USPL), and launched an etailing platform, Collectabillia, which sources and sells sports memorabilia and autographed merchandise of iconic players like Sachin Tendulkar, Cristiano Ronaldo and Rafael Nadal, among others.

The idea came to her during her student years in the US, where the National Football League (NFL) has a fanatic following and its merchandise flies off the shelves. “Since cricket was religion, I thought the opportunity would be great in India and I didn’t see anybody doing merchandising the way it was done in the West,” says Reddy. However, given India’s fascination for its celebrities, she knew that she needed a saleable face to propel her idea.  

That’s when she turned to Sachin Tendulkar, to cash in on his stature as the game’s presiding deity. But, despite her family’s close involvement with the Indian Premier League (Deccan Chronicle Holdings owned the team Deccan Chargers between 2008 and 2012 before they were terminated due to financial problems), Tendulkar remained out of bounds. For one, he was still playing actively and had limited time to discuss commercial opportunities. Besides, he already had a plethora of existing brand commitments that kept him busy.

So, getting through to the master blaster turned out to be much more difficult than barging into the London home of Edward Freedman, the former managing director of Manchester United Merchandising, through the fire escape. “His [Tendulkar’s] personal space was his personal space. For one and a half years, I chased him, met his wife Anjali and manager Vinod,” Reddy says. Finally, a common friend, whose daughter had played badminton with Anjana, connected the two.

 Reddy met Tendulkar in London in mid-2011 when India was touring England, and convincing him about her business idea was far easier than chasing him. “He loved my idea and thought the opportunity [for sports memorabilia] was right. Even today I ask him why he, being the god of cricket, invested in me, just a 23-year-old then,” she says.

Anjana took a big call on Kohli when he wasn’t performing this well.

For Tendulkar, Reddy represented something that he himself brought to the pitch—exemplary focus and competitive spirit. “Anjana is prepared to take the risk to be ahead of the game, and her commitment to pursue her dreams in spite of setbacks are impressive,” he says. That the master blaster remained cricketing royalty even in the last mile of his career was proved when Reddy made her most expensive sale of cricket bats autographed by him and Don Bradman, considered the greatest ever to have played the game: Each of those 51 made-to-order items, priced between ₹3 lakh and ₹10 lakh, sold out post Tendulkar’s retirement in November 2013.  
 
SECOND INNINGS
Once Tendulkar came on board—he holds a 21 percent stake in USPL as of March 2016—Reddy also roped in Accel, which has backed the likes of Facebook, Dropbox, Flipkart and BookMyShow, as an investor. The venture capital fund has, till date, invested about ₹64 crore in USPL in two rounds of funding, betting on the sustained product-level engagement, rather than just endorsement, that USPL has created. “The idea being that smart brands would be able to leverage celebrities to solve the discovery problem and scale capital efficiently,” says Mahendran Balachandran, partner at Accel.  

It was again Tendulkar who unwittingly gave Reddy an idea that would pivot her business completely. Collectabillia had launched a whole new set of merchandise to commemorate Tendulkar’s retirement in November 2013. “The one thing that really stood out was the clothes that we made,” says Reddy. The company sold around 10,000 ‘I love Sachin’ and ‘We with you’ T-shirts in under two weeks. Reddy figured that the pull of apparel was far greater than any other product she sold on Collectabillia, and that, in India, merchandising was a different ball game altogether, compared to the US. “It was always seen as a free giveaway. The habit of buying merchandise doesn’t exist here,” she says.

This triggered her entry into the fashion brands space—both online and offline—leveraging the allure of celebrities to the youth. “When we dug a little deeper, we figured there were no brands focussed on the youth,” says Reddy.

USPL launched men’s line Wrogn in November 2014 and Imara the next year, with current Indian cricket captain Virat Kohli and actor Shraddha Kapoor, respectively, as brand ambassadors; in September 2016, the company launched Ms. Taken with actor Kriti Sanon as its face. Says Tendulkar, “USPL operates an interesting business model that brings together celebrities, fans and fashion in a distinct manner.”

While the Indian fashion brands space is dominated by well-entrenched home-grown retailers like Arvind, the Aditya Birla Group, Reliance Retail, Future Lifestyle Fashions, among others, USPL has been able to clock an impressive CAGR in revenue, of 124 percent between FY14 and FY17. Reddy says the company’s FY17 revenue stood at ₹105 crore, and despite data showing losses mounting to ₹22 crore in FY16, she expects to break even at the end of the current fiscal with her volume of sales. A benchmark would be the growth curve of Roadster, Myntra’s outdoor lifestyle brand launched in 2012, which is estimated to have surpassed a topline of ₹500 crore and is expected to achieve a run rate of ₹1,000 crore by FY19.

At present, USPL’s offline and online sales are split in a 60:40 ratio. The company operates 15 retail stores across the country and the number is expected to rise to 35 by the end of the current fiscal. It works with its own design team, but outsources production to third-party manufacturers. Besides, it has key offline and online channel partners in Shopper’s Stop, Myntra and Flipkart. “Combining celebrity appeal with great assortment and marketing sets USPL’s brands apart,” says Govind Shrikhande, customer care associate and MD of Shopper’s Stop. “Anjana is a disruptor because of the way she has leveraged the strength of celebrities.”
 
STAR PERFORMER
Given its mascot Virat Kohli’s mass appeal, one would assume that much of Reddy’s future strategy would revolve around Wrogn. But Reddy claims that Imara, which is pitted against brands such as Biba and W, equals Wrogn in sales. At 10 to 15 percent cheaper than both, Imara’s competitive pricing is one of its biggest USP. The two brands together constitute 90 percent of USPL’s overall sales, with Ms. Taken and Collectabillia accounting for the rest. “In fact, Wrogn was more difficult to sell because we were competing with all the international brands,” says Reddy. And as Shrikhande, a fashion retail veteran, adds, “Casual men’s fashion is the most competitive category in India.”

But there’s no denying that Wrogn is indeed the biggest brand in her company’s portfolio in terms of buzz and recall, and Kohli has proven to be as much a runaway success for Reddy as he has been for the national team. Reddy had signed on the Indian skipper in late 2013, before he was elevated as captain and much before he reached his current stature as a player.

“Anjana took a big call on Kohli when he wasn’t performing this well. Now, his fortunes have changed and she has ridden the path of success,” says Darshan Mehta, president and CEO, Reliance Brands. “How much do celebrity connects work at these mainstream fashion brands? I would say quite well, if the celebrity is correct.”

Kohli on his part, says Reddy, is very involved with the brand. “He gives value additions when he can, and sends images of clothes he likes when he’s travelling abroad,” says Reddy.

Given the fickle nature of sports fame, what happens to USPL should Kohli’s fortunes change? “Luckily for Reddy, Kohli is going to be around for a long time,” says Saloni Nangia, president of retail consultancy firm Technopak. She adds that Reddy has tapped a market that rides on youth icons, that, in India, is nascent, yet exciting. “Fastrack [by Titan] is a great brand in that space, but within fashion there aren’t too many such brands,” adds Nangia.

“We believe she is on the path to creating some of the most exciting brands in fashion. Arguably, the best ones,” says Balachandran of Accel.

Like her brand ambassadors, Reddy, too, is playing it well.