How does footwear maker Liberty get its tread right?

Preeti Mehra

For the classes and the masses” - that’s how simply Liberty promoter Adesh Gupta describes his 50-year-old shoe business. Rolling out 50,000 pairs of footwear a day, for all age groups and income brackets, which ultimately find their wayto the consumers’ feet through 6,000 multi-brand outlets and 350 exclusive showrooms, he is only stating the obvious. And though, typical of the shoe business, his turnover does not reflect the scale of operations, Liberty Shoes Ltd is the only domestic company that is among the top five manufacturers of leather footwear in the world with a turnover of Rs 250 crore.

Besides being a household name in the country, the company’s products have a presence in 25 countries, with 50 showrooms overseas. “We work with our partners in West Asia, Singapore, Sri Lanka, Bangladesh, Fiji Islands and export our own brand as well as produce label products for the Italian and German market,” explains Gupta who is a hands-on Chief Executive Officer with a degree in Mechanical Engineering and a specialisation in ‘polyurethane applications in footwear’ to his credit.

Liberty has brands which are occasion-specific, targeted at children, youth, men and women. The Coolers brand offers sandals for the summer months, Footfun is for kids as they learn to walk, Force 10 and Gliders are the sporty options for the youth, Fortune are formal shoes for men, while for women there is Senorita and Tiptopp, the high heels variety.

Though Liberty’s branding strategy has all three elements – price, class and fashion – and its consumer offerings – both premium and mid segment – are showcased at its Revolution retail showrooms, what brings in the added volumes are institutional sales under the company’s ‘Warrior’ brands.

The volumes biz

As befits its name, Warrior has been able to make institutional sales its catchment area and expand its turf rapidly in a segment that no other domestic shoe maker has trodden. “These are special application shoes dedicated to different industry sectors such as oil and gas, construction, steel, transportation. Under the brand we also cater to niche segments such as schools, hotels, and airlines where there is a strict dress code,” says Gupta.

What has spurred the company’s special application shoe category for hazardous and other industries is the technical knowhow of making rugged yet lightweight shoes which cater to the specific needs of the particular factory environment. For instance, in some situations, the heat in the workplace is so high that feet need added protection, and in others it’s the strength and hardiness that counts. “We ensure safety footwear for industrial workers of all kinds. And now we are in the next stage of development of the Warrior brand and are planning to extend our offering to the defence and police sectors,” says Gupta.

But aren’t our soldiers and police personnel already clad in specialised footwear? Yes, says Gupta, but these are largely imported into the country. “We want to swap imports with domestic production which would be cheaper and provide employment to our people. We have a large team working on research and development of the Warrior brand,” he says, adding that currently almost a 1,000 companies including Maruti, the Tata group, Ford, ACC and Hyundai depend on Liberty for their niche shoe requirements.”

However, to expand operations to more government sectors, modification of government specifications for special application shoes is required. “We are currently pushing the government for this, as we have the required technology and the capacity, so that we easily can scale up our operations. The potential is immense and our target is 50 per cent growth in one year and doubling it in two years,” he says.

The Warrior brand is manufactured at the company’s two plants, one near Karnal and the other in Roorkee, which have a combined capacity of four million pairs. Warrior already contributes Rs 60 crore to the company’s turnover. “Footwear is a volumes business and Liberty has been smart enough to acquire the high technology required to get into the niche industrial safety shoe segment. Besides, school shoes, in which they are the market leaders, also brings them the numbers. The company has also been trying to tap other dress code service industries and that too will add to their sales,” comments a leather industry market watcher. He points out that the company was also the first in the country to introduce polyurethane applications in footwear and is very careful in its pricing strategy, so that it can cater to the general public.

The Wal-Mart connection

There is potential for volumes to also come in from Wal-Mart, which has been looking to source readymade footwear in all ranges from the company. However, this, says Gupta, is right now in a go-slow stage. He reveals that discussions were on with Wal-Mart some time ago but it was difficult for an Indian company to do the volumes business and compete on pricing with China, which has currency and subsidy advantages.

The rupee’s appreciation also affected Liberty, though the company is now ready with new capacities and is not averse to a sourcing arrangement if it works out favourably for it.

Revolution retail

However, apart from the ‘masses’ brand, Gupta’s focus is also on his ‘classes and mid-segment’ brands. These are what make up the shelves of the company’s Revolution retail showrooms. “Though we have a huge existing distribution channel, we found that our dealers and distributors had the limitation of showcasing only those products that they chose to sell. The idea of Revolution retail stores is to bring to the notice of the public at large, our dealers and distributors our full range of offering to consumers as well as our new products and new ideas,” explains Mr Gupta.

In fact, it is younger brother Adarsh Gupta, Executive Director, with a diploma in Footwear Design from ARS Sutoria Institute, Milan, Italy who takes the company forward where new ideas and designs are concerned.

Revolution as of now has 25 outlets, which it hopes to double in the next three years and is looking at malls for placing them. “There is a churn on the cards. We are looking at a prominent presence in some of the malls that are in the process of being built. With this happening Liberty expects to shake off its modest brand image and become more high-profile.

But one thing will never change - Gupta’s ear to the ground and focus on the common consumer. “You can do without food, but not without shoes,” he says, and adds that as the country’s economy is set to grow at 10 per cent in the future, his company’s will grow at 15 per cent.

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(This article was published in the Business Line print edition dated June 19, 2008)
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