Liberty Shoes, a listed company, is stitching together an expansion plan for its retail business. Liberty could also look to raise at least Rs 150 crore to fund the expansion.
The company is looking at an aggressive acquisition strategy to expand the retail footprint to 1,000 stores from 400 stores over the next five years.
Most of the new stores could be company owned.
Over the last two years, Liberty has spent funds out of internal accruals to improve its six manufacturing facilities across the country. With the manufacturing back end in place, Liberty is now looking for acquisition in the retail sector.
“The funds will be spent to drive our retail strategy and expansion of warehouses. We are ready to take on the challenge for foreign direct investment in the retail sector,” CEO Adesh Gupta told NDTV.
Liberty is trying to change the way in which the footwear industry operates by working closely with the retail units to study what the market is looking for. The ‘pull' factor could drive the products for the markets, unlike the practice in the industry. “We are creating a system which will allow us to track products where the pull is higher,” CEO Gupta said.
Liberty plans to have four regional warehouses which will help push its products in the retail markets quicker. That will help drive its ‘pull' strategy.
Liberty had earlier tied up with Pantaloon to set up FootMart to sell branded footwear. With a 49 per cent stake, Liberty was hoping to roll out 100 stores over five years in select cities like Ahmedabad, Bangalore, Delhi, Hyderabad, Mumbai and other cities. But after Pantaloon decided to cut back on its expansion plans, the joint venture failed to go ahead with its plans.
Liberty's plans for expansion are now being planned at a time when the industry is going through a difficult time. Industry is rife with rumours that one or more companies are up for sale because of the cash crunch.
Bata is India's largest footwear retailing company with nearly 1,000 retail stores. The company has turned around its operations in the recent months and its fortunes are looking up too.
Liberty Shoes shares have gained over 11 per cent over the past one month while the BSE Sensex is up only 4.3 per cent. It has a market cap of Rs 168 crore.
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