The more than three decades old footwear major, Liberty, is re-engineering its DNA to catch up with the globally-hyped young India. This is coming at a modest cost of ₹50 crore annually, even as the company clocked ₹350 crore in the last fiscal, closing at ₹500crore+ in 2013-14 and now stepping up ops to meet the targeted ₹600 crore this year. Another feather in its cap in the April 2013-February 2014 span included manufacture of more than a crore pairs of footwear. “Last year, it was 82 lakh pairs and by the year-end the aim is to touch the 1.4 crore pairs figure and increase this by 25 per cent next year,” Liberty director-retail, Anupam Bansal, told S&A.
Sales talk
Sales grew by almost 35 per cent as it clocked ₹350 crore in 2012-13 and the ₹600+crore target is set for 2014-15, in a scenario when people are lamenting a depressed market, Bansal says. “Of these figures, 25 per cent growth is organic that is brought about largely because of the supply chain eficiencies that we introduced. The consumption is there,” he stresses, “we just need to find out ways and means to encash it”.
The line of ballerinas from the sub-brand Gliders, which will be released this August is a riot in terms of colour, design and material.
As part of its expansion strategy, Liberty opened its first store in Colombo. Spanning across an area of 900 sq ft, the store, in line with its flagships in India, has come up in alliance with D Samson and Sons Limited.
Liberty Retails Revolutions merges with Liberty Shoes Ltd
Another exercise in terms of consolidating the brand and achieving the ₹600+ crore target was when Liberty Shoes Ltd (LSL) merged its retailing arm Liberty Retail Revolutions Ltd (LRRL) with itself to further strengthen its retail presence. Elaborating on the merger, Bansal says it is expected to improve operational costs by 2-3 per cent. “We will invest up to ₹50 crore to set up 200 more Liberty stores. The new showrooms will be a mix of company-owned and franchise stores,” he added.
Plans on the anvil
A slew of plans on the anvil on the retail front entail expansion of brand portfolio into adventure gear and footwear. What is in the works is extending the concept of the recently introduced aroma marketing to even taste that will help customers associate and connect with the brand more organically at the retail level, and definitely not before two years is also the diversification into apparel.
Reworking the DNA
33+ going on 20+ The focus for Liberty, positioned as a family brand, is the “bulk of the middle segment”. Every year about ₹50 crore is invested into enhancing the retail experience and thus also reducing the age of the brand. The step to lure more youngsters into its target audience is being superstructed by enhancing the entire retail experience by involving all the five senses. The exercise to cobble up a youthful retail experience began two years back when the entire visual merchandising at the stores underwent a change. “This gave us a 25-30 per cent increase in sales in terms of number of pairs and value”, Bansal informs.
Brand imagery The focus has since shifted to further enhance the brand imagery by offering “international fashion at Indian prices” with about ₹10-15 crore allocated to product development. Every collection has a hook through its line of accessories which contribute about 6-8 per cent to revenues. A total of 700 styles will be launched this year across its various concepts reached out to the consumer through its 10 sub-brands (check box on pg 58 for more on this).
Fashion quotient What has been calibrated is not just the fashion quotient across its collections, but also variety in terms of width. “We want to get more consumer-oriented and get into the fashion space right. Plus, we all know that the biggest competition is from the unorganised market and this is expected to continue for at least a decade now. Thus, the strategy is to offer a huge range. As of now there is no brand that offers the latest fad in footwear fashion in the manner that Liberty does,” claims Bansal. For instance, Force 10, the sub-brand for sports shoes begins at ₹250, going up to ₹2,500. “The ₹250 tag comes in to help the consumer move from the unorganised to the organised market”. The fact that Liberty sold 30,000 pairs in three months is a good enough indicator. Liberty’s comfort range under the sub-brand Tiptopp has been glamourised with rivets, buckles, etc while the line of ballerinas from the sub-brand Gliders, which will be released this August is a riot in terms of colour, design and material. The monsoonwear slides from Gliders again come in six bright hues with the black, grey and navy totally done away with.
Liberty Boom Box The latest to be introduced late March across its 400 exclusive brand outlets (93 company-owned, company-operated stores) at a cost of ₹10 lakh is the Liberty Boom Box which is a 24-hour radio broadcasting music initiative according to the mood of the hour. So while early mornings will be all about prayer, the music will gradually drift into instrumental and by evening the tempo will peak interspersed with brand communication, be it about new collections, sales, festive greetings, etc. For its 300+ franchise stores, the cost of implementing this project “comes at a minimal ₹7,500 per year and this covers the licensing and running of the radio station.”
Aroma marketing A unique fragrance, ‘Nature’s Spell’ has also been introduced in all its 400 stores. “Crafted with the unique mixture of delicate white tea with spicy ginger and fruit, the fragrance is expected to stimulate the power of affection and facilitate calmness thus relaxing the mind and body,” Bansal says.
From the retail front
With its flagships at about 2000 sq ft, the typical store ranges at 800-1,200 sq ft. Approximately 30 pairs are sold across each Liberty store every day and the target set is to take this up to about a hundred pairs. Having said this, Bansal claims “a good store sells about a 100 pairs on any given day.” The tier II towns sell more on an average. About 60 per cent of the business comes from the Hindi-speaking belt, followed by the South. The emphasis is now on developing the markets in the East, beginning in Bihar and Jharkhand.
- Liberty’s first store in Dhanbad about four months back did sales to the tune of ₹4 lakh on the opening day
- Stores in the metros average about 10 lakh per month
- The EBOs, one each at Tumkur and Gwalior, the four that came up in Jammu last year, individually clock ₹15 lakh per month.
- The Tumkur store is expected to generate more than ₹2 crore in a year.
- The stores in Jammu have added ₹10 crore to turnover annually. So you can see how tier II has expanded.
Customer Loyalty
“I don’t even want to start a customer loyalty programme. CRM is good for those who want their customer to visit their store every month,” boasts Bansal, and claims that 70 per cent of his existing clientele forms the loyal core, and the rest are the new customers. “I want my customer to visit my store once every six months. We offer a product which is strong in terms of quality and one person can wear each pair at least 200-300 times before disposing it. I am a brand they trust.”
I spoke to 5-10 customers while they were exiting a Liberty store in Jaipur and some in Delhi. All of them unanimously agreed that each “comfortable” pair of Liberty footwear that they buy lasts for about 10 months to a year!
Exports and institutional business
- Exports contribute about 15 per cent to the Liberty turnover. It has 25 showrooms across the Mideast in Saudi Arabia, Oman, Kuwait, Dubai, Jordan, Singapore, Nigeria, Uganda, Zambia, Thailand, Sri Lanka and Bhutan.
- It mass-produces basic leather shoes for France, Germany and Italy.
- Institutional sales which includes both safety and non-safety shoes, and footwear for schools (Prefect) contributes 25 per cent to the turnover.
International expansion: First exclusive store in Lankan capital
As part of its expansion strategy, Liberty opened its first store in Colombo. Spanning across an area of 900 sq ft, the store, in line with its flagships in India, has come up in alliance with D Samson and Sons Limited, the marketing and distribution arm of DSI Samson Group as its strategic partner in Sri Lanka. The DSI brand with a history of over 50 years now covers the entire country including the North and North East with over 200 showrooms and maintains a loyal customer base covering all segments of the market. “As Liberty has captured the imagination of footwear connoisseurs across borders, meeting and exceeding expectations in terms of ensuring customer satisfaction, it is expanding its presence internationally and offering fashion with comfort to the Sri Lankan market. After the launch of this exclusive store in Colombo; we are also launching 30 multibranded stores which will have Liberty and DSI brands,” says Bansal.
