Liberty Shoes Ltd, the flagship of the Liberty Group, has been shortlisted by Wal-Mart for supply of footwear.
Wal-Mart has in fact shortlisted seven Indian suppliers including Mirza Tanners.
Wal-Mart is already sourcing leather goods from India to the extent of Rs 100 crore.
This new order for supply of footwear is expected to be worth Rs 100 crore (Rs 1 billion) and would be shared by the seven suppliers shortlisted by Wal-Mart.
Adarsh Gupta, executive director, Liberty Shoes, said, "A high-power delegation from Wal-Mart, including their director for marketing, had visited all the seven suppliers in November last year. They are satisfied with the quality and our manufacturing process. Between April and September this year, which is when they normally place their orders, we will despatch their requirement. The order is expected soon."
"Based on the quality, these orders, in value terms, may go up to Rs 1,000 crore (Rs 10 billion) within the next three years," he said.
Gupta said Liberty is keen on establishing a manufacturing unit near Bangalore, only if VAT comes into effect from the next fiscal year.
"If VAT comes into effect, we are keen to invest in a manufacturing facility in Bangalore. We estimate an investment of Rs 8-10 crore (Rs 80-100 million). This plant will manufacture about 8,000-10,000 pieces of footwear per day and will mostly cater to 8-25 years age group.
"The price range for the footwear that may be manufactured in Bangalore will be in the range of Rs 300-500," he said.
The selection by Wal-Mart indeed augurs well for Liberty as the latter is revamping its brand position as well as the retail base.
Liberty will invest nearly Rs 20 crore (Rs 200 million) to set up 25 company-owned and managed retail showrooms under the 'Liberty Revolution' brand over the next 18 months.
The company also intends to cater extensively to the fashion-conscious customer.
"There is a team of eight designers, including Ashish Soni and Rahul Khanna," Gupta said. As part of its restructuring exercise, the company has decided to exit from 1,000 multi-brand outlets out of 6,000 such units.
"We will pull out of the outlets with sales below Rs 500,000 in order to increase the quality of service to our customers," he said.
The Rs 300 crore (Rs 3 billion) company also plans to increase the number of its retail outlets from 350 to 400. These exclusive Liberty showrooms will result in an additional 50,000 sq ft of retail space by the end of 2004.
