Otara Gunewardene.

Otara Gunewardene, the charismatic owner of Odel, took some time off her busy schedule for an exclusive interview with The Sunday Leader ahead of the launch of her company’s Initial Public Offering (IPO). She speaks candidly about her humble beginnings, her life, what inspires her and her plans for the future. Odel has become a household name in Sri Lanka while still retaining its aspiration brand image. Its main flagship store at Alexander Place has become one of Colombo’s landmarks and Otara herself has grown to be a business icon.

Excerpts:

Q: Tell us about the IPO and the reasoning behind it and how confident are you of its success?
A: The company has grown over the last 20 years and we felt that it was the right time for the company for a public offering. We judged this based on the progress of the company and the situation of the country which have coincided in quite a timely manner. We need funds for future growth and on an overall basis, a combination of things happened to prompt this. We are offering 16 million shares which make up 11.5% of the company. It is a relatively small share issue because we have no intention of selling out. That being said, the public are very keen to be a part of Odel and share in our success. People like to be a part of Odel, so I think the IPO will go well.

Q: In the recent past you have looked to expand the number of outlets, how has this come about and how will it impact your brand?
A: Our expansion hasn’t gone too far away from home, our furthest is in Panadura. We have opened just a few a sites around the greater Colombo area. We have another two locations identified but we haven’t rushed into it yet. I don’t believe in growth for the sake of growth, there is no point rushing into new locations without a proper plan or an idea of how they will perform. I believe in taking a little time to make sure that what we are attempting will actually work. That is one strategy that we find works for us.

Also with Odel, we can’t open in just any location. We have to be careful of where we open because the brand is such that we can’t dilute it. There has already been some concern among people as to whether we are diluting the brand with our plans for expansion. So we must progress without diluting our brand or dropping our standards. Not all locations are currently ready for Odel.

Q: You have perfected the mega store concept with your Alexander Place outlet. Any plans for similar stores in the future?
A: Not immediately. As it is, there is room for expansion where we are right now. We are constantly trying out new products and services, revamping areas of the outlet and we just opened a fresh display today. Expanding the main flagship store is also something we are looking to do within the next year. We have actually identified one other location in Wattala but haven’t completely finalised our decision to move there yet.

Q: Sri Lanka has quite a large bureaucracy. A lot of business people find navigating through it cumbersome. How do you manage?
A: Yes there is a lot of red tape! But I have looked at different countries and every country has its own rules and regulations and obviously some countries are a lot freer but it has not been a burden so far. People are very helpful and very supportive and what we are doing is for the improvement of Sri Lanka after all. Now, more than any other time, the brand belongs to Sri Lanka, it is not only mine anymore! It is a part of Sri Lanka. Sri Lankans have always been proud of it and now they have a chance of actually owning it.

Q: Odel is known for its loyal employees; tell us the secret behind your ability to manage people.
A: Yes I’m very involved in the management of the company but I also have a very strong team who are able to support me and contribute significantly to various aspects of running it. The main thing is letting people think for themselves and letting them be their own entrepreneur. They must contribute in their own way rather than constantly being told what they should or shouldn’t be doing. I believe in facilitating creative input. A lot of people who have been in Odel have been here for a long time and they enjoy working here. It is a nice environment and there is always something new happening. It is a job where you don’t have to be stuck in an office all the time.

Q: Do you always try to diversify and continuously change as a business tactic?
A: We monitor areas that are doing well and try to ensure we get good revenue out of every square foot from our products and services. We also monitor trends to see what is appealing to our customers and try and change as tastes and requirements change over time. What is hot today may get cold tomorrow, so it’s important that we keep track.

Q: We have all heard how you started your business. Tell us a bit about those years…
A: From the boot of my car! The story is out everywhere! I started off initially just selling clothing to my friends and family and people I knew and then just built up from there. I didn’t have a goal or a vision at all and I had no intention of getting into business. I had always wanted to work with animals. It just happened by chance and I discovered that I had an eye to create things people liked. And that’s how it started. People would come in (the shop) and like what they saw and I found it very exciting. Also, the money was good, the profits were good. I really enjoyed it. The interest just kept growing and that is how it evolved.

Q: You are a mother and probably have an active family life to attend to. How do you balance this with your business?
A: I can’t say it is easy juggling the two. Every day I try to find the correct balance between both and it shifts back and forth depending on what is happening in the company. I know that a balance is necessary between both and I try my best to spend adequate time in both places so that both flourish. I don’t have anything to do other than attend to work, family and of course my gym!

Q: Do your kids get involved in the business?
A: At the moment my younger son is designing some t-shirts. He is only 10 but he draws quite well and his designs are printed on t-shirts. He is very excited about that! My other son just finished his O/Levels and aside from a little bit of interest he mostly focuses on his studies.

Q: Are you involved with any sports? We heard you had taken up golf?
A: Yes! I once took up golf and was very enthusiastic for about five months, but then I dropped it because of time constraints. But I’d like to take it up again later on if there is time. I work out and go to the gym. I don’t do any sports at the moment.

Q: Would you say you are a spiritual person?
A: A little bit, I was brought up as a Buddhist but I can’t say I’m very religious. But yes I am spiritual and that helps me as well; to have some belief and some faith.

Q: Over the years, you have become quite a role model to young people with your success. What advice would you give them to find success?
A: First of all you must find what you really like doing. I know the general consensus is for young people to go find a job or think of a business and start doing it. But you really need to know that you like what you are doing. And I feel you can only succeed if you really love doing what you do. Of course, there is a lot of competition now. Obviously when I started there were quite a few stores as well but they weren’t that large scale and this meant that when they grew I could grow along with them.
I think the main thing is trying to enjoy what you do, understand what you do and understand the market you are in. It is also a lot about believing in yourself and knowing what is possible. To me, everything is possible.

Q: Getting back to the business, will there be changes in management with the IPO?
A: We only just started a board. We have four board members, all non executive. The chairman is my brother, another brother is also a shareholder and we have another director and the last one is me. It is a new board and we will not be getting any additional board members from the IPO. So there are no changes to the management in the near future.

Q: Aside from Odel, you are beginning to build a another strong brand; the Otara brand. Tell us about that.
A: That seems to have also taken off slowly. There is a Facebook page with 7000 odd fans. I also have a web site and a line of jewellery. That is done by Colombo Jewellery Stores. I design the jewellery and they make it and sell it. So it’s kind of like a franchise with them using my name.

Q: Looking back on life, what are your most memorable incidents?
A: Ah well…I don’t really get a lot of time to reflect. I tend to always look at the future and where I am now. If I look back now, since you asked me, the significant things are the beginnings of my business and having my children. Opening the main store at Alexander Place was quite significant, not only for me, but for retail in Sri Lanka. So there have been a few memorable times and I am sure there will be more to come. I think every day is a milestone.

Q: What about the future, for you and the business?
A: When it comes to business especially, I have to forecast where we are going. But I think it is also important to focus on where you are now. A healthy mixture of both is what is important.

Charumini DE SILVA

Odel will open its Rs 250.5 million Initial Public Offering (IPO) on July 5, becoming Sri Lanka's first fashion retailer to be listed on the Diri Savi Board of the Colombo Stock Exchange (CSE).

The IPO issuing 16.7 million shares at Rs 15 will be up for subscription from June 22 whilst Odel is being advised on the listing by CT Capital, which is also the lead manager to the IPO.

From left: CT Capital Director, Channa Amaratunga, Odel CEO Otara Gunewardene and Odel Group CEO Nishan Fernando at the press conference. Picture by Saliya Rupasinghe.

The timing was perfect to enter into the capital market with the post-war resurgence in the country and the economy, along with a highly active stock market, Odel CEO Otara Gunewardene told, a press conference yesterday.

She said the company expects to expand its local consumer base to 60 percent while the balance to be foreign clientele. As the tourism sector is also picking up it will also benefit the company. We have a foreign clientele of Europe, India, Middle East and China, but it differs time to time and we have a mixture of our foreign clientele. Hosting of various international events has also benefitted the market immensely, she said.

Seeing the potential to be expanded islandwide, Odel at present is only focusing in the mid upper local market while maintaining the brand, quality and standards mainly in the Western province.

“It is not that we are only setting up branches, but they should also perform well. At present all the outlets are performing well beyond expectations”, Gunewardene said.

CT Capital Director Channa Amaratunga said there is tremendous interest in Odel’s IPO. The 16.7 million shares are to be distributed among the three board investor categories of employees (1.2 million shares), retail investors (3 million shares) and non-retail investors (12.5 million shares).

Applications can be made for a minimum of 100 shares or in multiples of 100 and for the purpose of allotment, public applications for up to 5,000 shares will be categorized as retail and applications lager block as non-retail so as to minimize the chance of smaller investor being crowded out.

He said Odel is geared to make a significant increase in the revenues and profit margins.

Daily News Wednesday, 23 June 2010   | http://www.dailynews.lk/2010/06/23/bus01.asp

IPO of 16.7 million shares opens 5 July; 11.5% of equity to be offered

A rare opportunity presents itself for the public to share in the runaway success of a premium lifestyle brand when ODEL Limited formally opens its Initial Public Offer (IPO) on Monday, 5 July, becoming Sri Lanka's first fashion retailer to go public.

Seeking to raise Rs. 250.5 million for expansion, Sri Lanka's definitive lifestyle retail brand is offering employees and members of the public an 11.52 per cent stake in its equity, with an offer of 16.7 million shares at Rs. 15 each.

ODEL CEO Otara Gunewardene (centre) addressing the media yesterday held to announce the Initial Public Offering (IPO) in ColomboPic. by Daminda Harsha Perera.

Coming almost 20 years to the day that ODEL's first store opened at Dickman's Road, Colombo 5, the IPO will broad base ownership of a privately held business that has grown exponentially over the years, increasing its retail space from 400 square feet to 128,000 square feet; amassing assets of Rs. 2,348 million and achieving a near five-fold growth in net profit over the past five years.

A brand that has retained its aspirational aura even after growing to 12 stores and 700 plus employees and achieving 'household-name' status, ODEL is seeking to expand further in the anticipated post-conflict resurgence of Sri Lanka to make its unique offering accessible to a larger segment of the population with new strategically-located stores and improvements to its existing stores and facilities.

Presenting its IPO Prospectus to the media on Tuesday, 22 June, the company said its expansion programme includes new branches and business infrastructure development, with new branch locations to be finalised after market surveys and feasibility studies and identifying favourable sites.

"Given its well-established and recognised brand equity, the company believes that its store expansion plan will contribute swiftly to boosting company revenues and profitability," the Prospectus said.  The 16.7 million offered shares are to be distributed among three broad investor categories - Employees (1.2 million shares), Retail investors (3.0 million shares) and 'Non-Retail' investors (12.5 million shares).

Applications can be made for a minimum of 100 shares (Rs 1,500) or in multiples of 100, and for the purpose of allotment, public applications for up to 5,000 shares will be categorised as 'Retail,' and applications for larger blocks as 'Non-Retail' so as to minimise the chance of smaller investors being crowded out.

Subsequent to the IPO, the entirety of ODEL's 144,950,000 issued and paid up shares will be listed on the Diri Savi Board of the Colombo Stock Exchange.

Addressing journalists, Otara Gunewardene, who started ODEL's phenomenal journey by selling export-surplus apparel from the boot of her station wagon more than two decades ago, described the IPO as a milestone of corporate and personal significance.  "There hasn't been a single dull moment for me or for ODEL since inception," she said. "ODEL may have happened quite by accident. But what followed in the subsequent decades was far from accidental."

"We made a determined effort at unlocking ways to indulge each customer, and creativity across the world provided a muse for our eclectic brand. But mostly, it was our own imagination that inspired us, the imagination of a team, who like me, wakes up each morning challenging our boundaries. I believe that is what makes us distinctly different from the rest.  It is this incredible energy, and our understanding of what our customers want, is what will help us drive ODEL into the world of possibilities that the IPO is opening up for us," Gunewardene said.

Now comprising 12 stores and with its latest store in Battaramulla poised to open in July, ODEL is well positioned to ride the wave of optimism and growth as Sri Lanka's economy grows in the post-conflict area.

The company is set to benefit from higher levels of domestic consumption activity amid fast-improving macroeconomic conditions that are expected to contribute to rising disposable income levels in the country.

ODEL is also synonymous with tourists for shopping in Sri Lanka, and the company's centrally-located flagship store is one of the most sought-after tourist shopping destinations in the island.

With the conclusion of the 26-year separatist insurgency last year, tourist arrivals to Sri Lanka are expected to surge to record highs, and ODEL is set to capitalise on this opportunity as an internationally recognised fashion brand among tourists to Sri Lanka.

In addition to building the brand equity of ODEL over the years, Gunewardene has also created several other related brands, including 'Backstage' for an extensive range of fashion accessories and 'Embark' for a cause-linked product range that supports a personal community programme focused on the welfare of community animals.

The Board of Directors of ODEL Limited comprises of Ruchi Gunewardene (Chairman), Otara Gunewardene (CEO), Paul Topping, Sanjay Kulatunga and Eardley Perera.

DailyMirror Wednesday, 23 June 2010   | http://www.dailymirror.lk/print/index.php/business/127-local/13710.html

ODEL CEO Otara Gunewardene (centre) addressing the media yesterday held to announce the Initial Public Offering (IPO) in ColomboPic. by Daminda Harsha Perera.

Otara Gunewardene  took some time off her busy schedule for an exclusive to the Sunday Leader to talk about her future business plans and to divulge some interesting tidbits on her busy life.

Odel is on the verge of becoming public with 11.5% of their equity up for grabs in a soon to be released IPO. Otara, who casually and truthfully quips that her company ‘started out of the boot of her car’ is offering upto 16 million shares which she hopes will raise upto rupees 250 million to help expand Odel.

The retailer has net assets worth roughly 2.3. billion rupees and in recent years has expanded to include a number of stores in the greater Colombo area. The expansion has raised doubts as to how the chain is going to preserve its upmarket brand image; Odel is known for its savvy and innovative approach to retail and its flagship store at Alexander Place has become one of Colombo’s key landmarks and ‘in’ places to be seen at.

The management of the 0rganization has recently seen a change in structure and more changes may be due in the future. But Otara says nothing drastic is on the cards, ‘I believe in planning for the future but I also think one must focus on the present, a healthy mix of both is what is ideal’.

For the full interview read this Sunday’s edition.

The Sunday Leader Wednesday, 30 June 2010   | http://www.thesundayleader.lk/2010/06/24/out-of-the-boot-of-her-car/

16.7 m shares on offer at Rs. 15 each

The Colombo Stock Exchange has approved the Initial Public Offering (IPO) worth Rs. 250.5 million of Odel Ltd., the country's popular lifestyle shopping chain.

The IPO issuing 16.7 million shares at Rs. 15 will be up for subscription from June 22 whilst the official date of its opening is July 5. Following the IPO, Odel shares will be listed on the Diri Savi Board of the CSE. Odel is being advised on the listing by CT Capital, which is also the lead manager to the IPO.

"I am excited and confident," Odel Founder Otara Gunawardene said about the upcoming IPO.

Noting that Odel had been planning to be listed for a while, Otara said the current timing was perfect with the post-war resurgence in the country and the economy, along with a highly active stock market.

Being a trendsetter, Otara via Odel revolutionised the lifestyle shopping in Sri Lanka and her current success, 12 stores in total, has been internally financed via personal equity as well as bank borrowing.

She said that the IPO, apart from enabling the investing public to be a stakeholder of Odel's future success, would help raise fresh funding via the market, which most term as "zero cost cash".

Otara said the 10% offering to the public wasn't symbolic but significant, considering the fact that Odel had been a family-owned business since its inception. "The amount we intend raising (Rs. 250.5 million) is what we require right now and we may consider additional measures later on," Otara added.

Odel's vision has been 'To be Sri Lanka's foremost lifestyle; INstyle Brand; with global reach," whilst its mission is to provide customers with an unparalleled selection of fashion right and lifestyle products in an environment that is enjoyable and welcoming and encourages customers to tap into their creativity and explore their personal styles.

Both Otara and Odel are award winners.   Since November, Otara has spearheaded a rapid yet carefully planned expansion, opening Odel outlets in Mount Lavinia, Moratuwa, Panadura and Maharagama, whilst the next location will be Battaramulla.

Some of the new locations are evolving shopping hubs in the Greater Colombo area and there are plans to open up a few more before the end of the year. The ODEL chain in Sri Lanka includes Alexandra Place, Kohuwala, Ja-Ela (Realty Plaza), Majestic City, Dickman's Road, Nugegoda (Warehouse), Crescat (Backstage) and the Bandaranaike International Airport.

Otara's strategy of opening outlets in the suburbs or popular towns outside Colombo is to enable more people within select towns as well as nearby areas, while also elevating the shopping experience to a new level for those people.

The ODEL website www.odel.lk also offers online shoppers the same ODEL experience from the comfort of their homes or offices, with sophisticated and seamless e-commerce functionality.

DailyMirror THURSDAY, 10 JUNE 2010   | http://www.dailymirror.lk/print/index.php/business/127-local/12675.html

June 22, 2010 (LBO) – Sri Lankan retailer Odel said it made 141.8 million rupees in net profits last year, as sales recovered and margins improved, with money from a share issue to be used to retire debt and expand.

The retail chain's profits for the financial year ending March 2010, revealed for the first time, were up 313 percent from the year before when sales were flat because of the economic slowdown.

Odel's sales last year rose 23.8 percent to 2.41 billion rupees, while margins increased to 5.8 percent from 1.7 percent the year before, its prospectus said.

About 150 million rupees of the initial public offer opening on July 5 will be used to expand the number of Odel outlets, and 100 million rupees to retire short-term debt, Channa Amaratunga of CT Capital, the lead managers, told media at the launch of its IPO.

Odel, a well-known Sri Lankan brand with 11 stores, serves upper and middle-class customers, about 40 percent of whom are foreign tourists and residents.

Odel plans to issue 16.7 million shares at 15 rupees a share which would push up its total share capital by 11.52 percent to 144.95 million shares.

Amaratunga said 1.2 million shares are allocated to employees, 3.0 million shares to retail buyers and 12.5 million shares to high-net-worth and institutional investors.

After the IPO, Odel founder and chief executive Otara Gunewardene's shareholding would fall to 55.77 percent from 63.03 percent, its prospectus said.

Ajith Gunawardene, the elder brother of Otara Gunawardene, and deputy chairman of the John Keells Holdings conglomerate, is also a shareholder of Odel whose stake will fall to 27.88 percent from the present 31.51 percent.

Odel's profitability had see-sawed in the past five years, its prospectus showed.

In the financial year ending March 2006, Odel made a net profit of 29.5 million rupees, which rose in 2007 to 74.9 million, but fell in 2008 to 67 million and was down again to 34.3 million rupees in 2009.

However, its revenue growth had been more stable. In 2006 Odel had revenue of 1.57 billion rupees, in 2007 1.68 billion rupees, in 2008 1.94 billion, and in 2009 1.95 billion rupees.

About 75 percent of its revenues come from the sale of clothes, while the rest is made up of rent, high-end ornaments and other collectables.

* IPO of 16.7 million shares opens 5th July
* 11.5% of equity to be offered

A rare opportunity presents itself for the public to share in the runaway success of a premium lifestyle brand when ODEL Limited formally opens its initial public offer on Monday 5th July, becoming Sri Lanka’s first fashion retailer to go public.

Seeking to raise Rs. 250.5 million for expansion, Sri Lanka’s definitive lifestyle retail brand is offering employees and members of the public an 11.52 per cent stake in its equity, with an offer of 16.7 million shares at Rs 15 each.

Coming almost 20 years to the day that ODEL’s first store opened at Dickman’s Road, Colombo 5, the IPO will broad base ownership of a privately held business that has grown exponentially over the years, increasing its retail space from 400 square feet to 128,000 square feet; amassing assets of Rs. 2,348 million and achieving a near five-fold growth in net profit over the past five years.

A brand that has retained its aspirational aura even after growing to 12 stores and 700 plus employees and achieving ‘household-name’ status, ODEL is seeking to expand further in the anticipated post-conflict resurgence of Sri Lanka to make its unique offering accessible to a larger segment of the population with new strategically-located stores and improvements to its existing stores and facilities.

Presenting its IPO Prospectus to the media on Tuesday, 22nd June, the company said its expansion programme includes new branches and business infrastructure development, with new branch locations to be finalised after market surveys and feasibility studies and identifying favourable sites.

“Given its well-established and recognised brand equity, the Company believes that its store expansion plan will contribute swiftly to boosting Company revenues and profitability,” the Prospectus said.

The 15.7 million offered shares are to be distributed among three broad investor categories – Employees (1.2 million shares), Retail investors (3.0 million shares) and ‘Non-Retail’ investors (12.5 million shares).

Applications can be made for a minimum of 100 shares (Rs. 1,500) or in multiples of 100, and for the purpose of allotment, public applications for up to 5,000 shares will be categorized as ‘Retail,’ and applications for larger blocks as ‘Non-Retail’ so as to minimize the chance of smaller investors being crowded out.

Subsequent to the lPO, the entirety of ODEL’s 144,950,000 issued and paid up shares will be listed on the Diri Savi Board of the Colombo Stock Exchange.

Addressing journalists, Ms. Gunewardene, who started ODEL’s phenomenal journey by selling export-surplus apparel from the boot of her station wagon more than two decades ago, described the IPO as a milestone of corporate and personal significance. “There hasn’t been a single dull moment for me or for ODEL since inception,” she said. “ODEL may have happened quite by accident. But what followed in the subsequent decades was far from accidental.”

“We made a determined effort at unlocking ways to indulge each customer, and creativity across the world provided a muse for our eclectic brand. But mostly, it was our own imagination that inspired us, the imagination of a team, who like me, wakes up each morning challenging our boundaries. I believe that is what makes us distinctly different from the rest. It is this incredible energy, and our understanding of what our customers want, is what will help us drive ODEL into the world of possibilities that the IPO is opening up for us,” Ms. Gunewardene said.

Now comprising 12 stores and with its latest store in Battaramulla poised to open in July, ODEL is well positioned to ride the wave of optimism and growth as Sri Lanka’s economy grows in the post-conflict area. The company is set to benefit from higher levels of domestic consumption activity amid fast- improving macroeconomic conditions that are expected to contribute to rising disposable income levels in the country.

ODEL is also synonymous with tourists for shopping in Sri Lanka, and the company’s centrally-located flagship store is one of the most sought-after tourist shopping destinations in the island. With the conclusion of the 26-year separatist insurgency last year, tourist arrivals to Sri Lanka are expected to surge to record highs, and ODEL is set to capitalize on this opportunity as an internationally recognized fashion brand among tourists to Sri Lanka.

In addition to building the brand equity of ODEL over the years, Ms. Gunewardene has also created several other related brands, including ‘Backstage’ for an extensive range of fashion accessories and ‘Embark’ for a cause-linked product range that supports a personal community programme focused on the welfare of community animals.

The Board of Directors of ODEL Limited comprises Ruchi Gunewardene (Chairman), Otara Gunewardene (CEO), Paul Topping, Sanjay Kulatunga and Eardley Perera.