Little fib helped make entrepreneur sheet king

DALLAS — Arun Agar wal owns and runs a half-billion-dollar company called Nextt.

You’ve probably never heard of him or his company, but chances are you’re in bed with him.

The 45-year-old CEO of Nextt sells sheets and bedding accoutrements to just a b o u t e v e r y ma j o r U. S . retailer and specialty store — from Wal-Mart, Costco, Kohl’s and Nordstrom to Neiman Marcus — through private labels and well-known brands.

Nextt’s bedding is made in Agarwal’s homeland of India by Alok International, a publicly held textile giant with a factory complex that spans 600 acres outside of Mumbai. Alok’s weaving shed is the world’s largest under one roof, taking up 14 acres with 14,000 jet-air looms churning out 1.6 million linear feet of fabric a day, while the adjacent embroidery facility makes 5 billion embroidery stitches daily.

Nearly half of Alok’s total operation is dedicated to Nextt products that include sheets, pillow covers, quilts, comforters, throw pillows and more recently, towels.

So when retailers ask Agarwal whether he has enough c a pac i t y t o s o urc e t hei r orders in a timely fashion, he assures them that he can.

Agarwal is a highly energetic entrepreneur who has brought technolo gy and innovation to an industry that isn’t known for either.

“If I’m going to compete, I’m not going to win as the cheapest ,” Agar wal says in his tiny office in Dallas’ Design District. “At first, it was about being cheapest. So I was always 10 cents away from being fired. There is a difference between cheap and value. I have to have both, and I do.”

His trading partnership with Alok st ar ted with a h a n d s h a ke i n 2 0 0 8 . I t ’s become a symbiotic relationship where worldwide sales and marketing are done through Nextt and manufacturing is done through Alok.

Michelle Gloeckler, currently chief merchandising officer for Academy Sports, worked with Agarwal when she was senior vice president over the home division of Wal-Mart and traveled to India with him to see the Alok factories six years ago.

“Nothing like getting to know somebody and their values as when you travel out of the country together,” says Gloeckler, who left WalMart in August. “The things that I saw in the factories, whether it was worker conditions or quality assurance measures, gave me a lot of confidence in the products that Wal-Mart was buying.”

Happy where he was

C o mi n g t o t h e Un i t e d States wasn’t Agarwal’s idea.

“I had no intention of leaving my job. I was happy,” he says.

But his girlfriend — now wife — Anu wanted him to get his master’s degree in computer information from a U.S. university, so much so that she sent his application to Southern New Hampshire University for him, and he was accepted.

Arun went to the American consulate in Calcutta during a lunch break to get his F-1 student visa but didn’t bring the supporting documents needed. He figured he’d end Anu’s nagging with a halfhearted try.

“I really wanted the visa officer to reject me so I could tell this girl, ‘Hey baby, they rejected me. What can I do? Sorry, too bad,’” he says with a laugh.

To his shock, the officer c h a s t i s e d h i m f o r b e i n g unprepared but issued him a student visa anyway.

“I was so dumbfounded,” says Agarwal, who became a naturalized citizen in 2002. “So fate. I really feel that the fate took over.”

Fate came into play again CEO, Nextt 45 2002 India Dallas

Bachelor of Science, Maharajas College in Jaipur, India; MBA, the Institute of Management Technology at Ghaziabad, Uttar after the couple moved to Dallas for his computer analyst job here.

They started a side gig selling tablecloths, place mats and napkins with Indian block designs at a kiosk in an area mall around Christmas in 1998.

A neighborly retailer at the mall suggested that they sell their wares at an upcoming trade show.

As newbies, the couple couldn’t get into the main show area, so they leased a four-day booth nearby for $1,100.

The first three days were a total bust.

Neiman who?

On the final day, the tabletop buyer from Neiman Marcus showed up and was smitten.

Arun asked what kind of store Neiman’s was. “That was the level of the knowledge that we had,” he says.

The buyer wanted to know about their c apacit y and warehouse.

The couple had neither. Arun fibbed, telling her the warehouse was in Fort Worth — which was really a P.O. box — but said that she couldn’t see it because of insurance restrictions.

Amazingly, the buyer gave the line a major presentation in Neiman’s fall program.

“I still can’t believe that she did it, because she would have lost her job if we hadn’t come through,” he says. “And Pradesh, India; and master of science in computer information systems, Southern New Hampshire University. Advanced certificate in/studied international business at Harvard University.

Married to Anu for 19 years. They have a 15-year-old daughter, Anya. we almost didn’t. We had lots of ups and downs before we fulfilled the order in those few months.”

That was the beginning of a lengthy relationship with Neiman Marcus and the launch of Agarwal’s home furnishings business that evolved into furniture and accessories.

He switched bedding textiles in 2008 with his handshake deal with Alok, at first being a sales rep and then a separate company.

Agarwal’s initial sales targets were industry giants WestPoint Homes and Fieldcrest, which wouldn’t give him the time of day.

That turned into a blessing in disguise, he says. “It forced me to go directly to retailers, who were changing from name brands to private brands and were looking for the right manufacturing base.”

One of his first cold calls was at Wal-Mart in Bentonville, Ark. Five months later, he had a deal.

But landing the world’s largest retailer wasn’t like finding nirvana.

“If you were in Wal-Mart, no one else would touch you,” he says. Several retailers who are now big customers turned up their noses, saying they wanted higher quality than Wal-Mart.

“That’s changing,” he says. “Yes, the product is very important, but the supply chain is even more import- ant. You can spec a product up or down, but you can’t sell it if you don’t have it. And you have to offer transparency so that what you say you’re selling is actually just that.”

L ast October, J.C. Penney became the latest in a string of major retailers that couldn’t verify whether the sheets it was selling that were distributed by a Nextt competitor were actually 100 percent Egyptian cotton or knockoffs.

“That misstep (by Welspun India Ltd.) helped us solidify our relationships with our retail partners,” Agarwal says. “Our supply-chain transparency was once again proved to be in place with proper checks and balances.”

True, says Bill Simon, former president and CEO of Wal-Mart U.S., who got to know Agarwal as an early supporter of Wal-Mart’s initiative in 2014 to increase U.S. manufacturing. Agarwal served on Simon’s council and tried to set up a yarn spinning operation in South Carolina but got waylaid by a bureaucratic bottleneck.

“His company was one that we were able to count on to always deliver as promised,” says Simon. “If you put those things together — reliability, consistency and support of your customers’ initiatives — it is hard to go wrong.

“That is the company that Arun runs.”

Thread count patent

In 2012, cotton prices quadrupled. It’s hard to deflect that kind of lightning bolt. Agarwal managed the storm as best he could but thought there had to be a better way to make a quality differentiation other than cotton thread count.

Polyester blends had been around for years, but there wasn’t a consistent way to measure manmade thread counts — until he came up with one and patented the process and trademarked the fabric with Alpha Cotton in 2015.

It’s geared toward the aspirational consumer who wants higher quality but at a more affordable price.

“The good news is that with polyester you can add features: wrinkle resistant, anti-microbial, quick drying, low pilling, softer,” he says. “This fabric has become substantial volume in marketplace.”

Sheets are a loss leader on Black Friday, with retailers selling nearly $1 billion worth last year, Agarwal says. A substantial portion of that was sold at Wal-Mart in just three hours.

“It’s become a significant day for us,” he says.

It’s also become a threadcount battleground.

Earlier thi s year, Nextt announced that the U. S. International Trade Commission’s Customs and Border Protection will help police false labeling practices from sheet importers, as well as enforce Nextt’s patents — particularly during Black Friday promotions.

Acquisitions

So what else is on Agarwal’s mind?

Window t re atments, a return to tabletop goods and undergarments to name a few.

He has visions of becoming a billion-dollar company by 2020 through organic growth, sooner if he makes acquisitions.

Rick Platt, founder and president of Brand Matter LLC, helped add Ellen Tracy and Caribbean Joe to Nextt’s portfolio of brands.

Platt says he looks at several criteria in choosing a licensing partner: a strong understanding of the business, distribution into the right stores, and enough money to invest and help build the brand.

Agarwal met all of those, Platt says, plus one more: “You want to do business with people you like and people that you get along with, see eye-to-eye on. That’s a big thing in Arun’s favor.”