RETAIL DEMOCRACY: "Weaving a New Kind of Company: By encouraging its suppliers to become shareholders, an Indian retailer may become a model for the developing world," by Manjeet Kripalani, BusinessWeek, 23 &30 March 2009.

Fabindia was founded in 1960 by John Bissell, an American working for the Ford Foundation in New Delhi, and is now run by his 42-year-old son, William. It has 97 stores in India's big cities and small towns. In 2008, it had revenues of $65 million, an increase of 30% over the previous year. And as Fabindia has grown, it has come to depend entirely on some 22,000 weavers, block printers, woodworkers, and organic farmers to provide the handmade goods it sells. "We're somewhere between the 17th century, with our artisan suppliers, and the 21st century, with our consumers," says Bissell. Bissell and his staff have worked with the artisans to integrate them into Fabindia and, by extension, the modern economy. At first that meant helping artisans refine their traditional homespun designs to appeal to more chic urban tastes as well as improving the consistency of their wares. Two years ago, Bissell went even further. He set up 17 centers throughout India, each organized around a particular region's artisanal tradition. These centers, in turn, were incorporated as companies in which artisans collectively own 26%. Fabindia encourages each artisan to buy shares, which cost $2 apiece--a reasonable sum for a weaver who might make a monthly profit of $100 from selling his woven cotton to Fabindia.A wholly owned Fabindia company controls 49% of each subsidiary; the rest is held by other Fabindia employees and private investors. So far, 15,000 artisans have become shareholders. The ownership structure is mutually beneficial for Fabindia and the artisans; the retailer ensures it has the supplies it needs, while the weavers, dyers, and so forth lock in steady income. "We pool our effort and funds, the artisans pool theirs, and we share the risk," says Bissell.