New footprints: How will Liberty Shoes diversification moves fare

New Delhi | Updated: Oct 18 2004, 05:30am hrs
Taking its diversification plans forward, footwear major Liberty Shoes Ltd plans to get into another new area: highway malls. This follows finalisation of its plans to enter the sanitaryware segment, which is the companys second venture after it hived off its retail business into a new subsidiaryLiberty Retail Revolution Ltd.

Plans are not finalised as yet, but we intend to get into travel-related services. The areas that we could look at are eateries, shopping, in fact everything to cater to the needs of the traveller. These would essentially function as one-stop shops for highway travellers, says Liberty Shoes director Adarsh Gupta.

In the sanitaryware segment, the company has set up a subsidiary Liberty White-ware Pvt Ltd and will be investing Rs 30-40 crore in the first phase on plant and machinery. Construction of the plant, that is coming up at Neemrana Industrial Area, will begin by Diwali and the first products should roll out by September next year.

Says Mr Gupta, We have tied up with an Italian major as a technology partner for the new business. As per the understanding, the Italian partner will provide the machinery and technology, but there will be no financial stake.

In keeping with its strategy to achieve a premium brand image, the products in the sanitaryware category will also be premium. The company may not use the Liberty brandname for its sanitaryware products.

Explaining the rationale of expanding into areas unrelated to its core business of footwear, Mr Gupta says,We are exploring the possibility of expanding to any area where we can leverage our expertise in manufacturing and marketing and image of quality and reliability. What will differentiate our products will be superior looks and finishes. There is a pronounced shift from necessity to lifestyle products.

Coming from an unrelated business also has other advantages. Since we come with no baggage, we can avoid dealer resistance, he adds.

Liberty Shoes, which last year went in for a restructuring exercise, split its manufacturing and retail business in January 2004, with Liberty Shoes as the holding company for its shoe business and a subsidiary Liberty Retail Revolution Ltd for its retail business.