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Sep, 16 2010

Liberty to succeed

Uniting style with comfort, Liberty has stepped into 140 cities in India and 20 countries abroad, offering a fitting franchise opportunity. Anupam Bansal, Director, Liberty Shoes Limited, unveils company’s expansion plans.

How many company-owned and franchised showrooms do you have? What are your expansion plans?

We have opened 300 stores through franchise model and have 90 stores through company-owned model. Apart for shop-in-shops, we also retail through more than 2,000 MBOs. For expansion, we are looking at a combination of franchise model and company-owned and company-operated stores. We are planning to add about 40 of our own stores and around 50 of franchised stores by March 2011.

In which year did Liberty start franchising? What kind of transformation have you seen in the industry over the years?

We started franchising way back in early 90s. There has been a huge transformation since then. If we talk about the early 90s, the kind of franchising that was done was not the real franchising. Most of the people started looking at it as an MG or rental model. Today, nobody is looking at it just from a fixed monthly income perspective. Most of the people respect the model for what it is today rather than taking into consideration the business angel.

What it costs to start a franchisee? How long does it take to break even and what are the minimum requirements?

We look at an investment of around Rs 25 lakh, where Rs 10 lakh go in store fit-outs and Rs 15 lakh in stocks. As per the present deal, the stock is sold to the franchisee, but if the stock is not moving for genuine reasons, we help them move the dead stock by giving them different offers to get it reallocated. The franchisee needs to have hands-on knowledge of the business. We look at entrepreneur rather than an investor. He can be from nay industry but his approach should be hands-on.

Which are your target cities for expansion?

We are looking at tier II and III cities than metros because we see the actual potential there. We are aiming at all the cities with more than 50 lakh population. There, we will position our brand as value for money, where purchasing power is less.

What is the present size of the footwear industry in India and what is its growth rate?

We are moving away from the unorganised market to the organised one. People have now started looking at footwear as a branded product. But overall, only 15 to 20 per cent of the market is organised. We estimate the industry to be somewhere around Rs 15 to 20,000 crore. Five years down the line, there would be more branded presence.

What kind of upgradation has your showrooms gone through in the recent past?

After Bata, we have been the pioneers of footwear industry. We provided a new kind of positioning to the footwear sector with the new target profile. But in the last 15-20 years, there has been a change in the consumer profile. We have done a major upgradation of our stores, where we are revamping all our outlets as per the new design. All our franchise outlets will undergo changes, which will give the stores a more vibrant look.

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