Will raise prices by 5-10% from Apr 1: Liberty Shoes

2454 Investors following Liberty Shoes. Share this News with them.

0

Like this story, share it with millions of investors on M3

Will raise prices by 5-10% from Apr 1: Liberty Shoes

Adesh Gupta, CEO of Liberty Shoes, in an interview with CNBC-TV18’s Reema Tendulkar and Ekta Batra, spoke about the recent happenings in the company and the road ahead.

Post your opinion here

 

0

Tweet

Share on Tumblr

ALSO READ See latest News about Liberty Shoes See previous management interviews See what other Experts & Brokerages are saying about Liberty Shoes Liberty Shoes BSE | NSE 30/05/12 Are Mutual Funds betting on Liberty Shoes?

Adesh Gupta, CEO of Liberty Shoes , in an interview with CNBC-TV18's Reema Tendulkar and Ekta Batra, spoke about the recent happenings in the company and the road ahead.

Below is the verbatim transcript of the interview. Also watch the accompanying video.

Q: Have you got any kind of benefit from the budget this time. Will the setting up of those seven leather clusters benefit the company and the sector in any way?

A: These clusters are for the segment or sector. These clusters won't be ready for production, if they are set up. We will have to check the policy, to see when this structure will be in place. It is a policy where the clusters should come up. It's not that they will be ready for production. Liberty always has enough capacity at the tax free plants in Uttaranchal and Himachal. As of now, we are not looking at the individual capacity expansion going forward. We do not see any major benefit of the clusters coming to India.

Q: You have a strong presence in South India, as far as your expansion of retail stores is concerned. Can you just give us an update of your guidance on the possibility of opening these hundred stores?

A: We anticipated about 100 stores by the calendar year or financial year 2010-11. We are on target right now. We hope to complete the target of opening the exclusive outlets in the south as well as pan-India. We are quite bullish about our retail expansion plans in the next year also. We are looking at expanding our retail presence in pan-India, where south will take the major initiative in that area. We foresee growth in south more than in any other areas.

Q: Geographically, how much of your revenues actually come from South India? You did around Rs 260 cores for your FY10 revenues. Could you just break up the geographic region and what could you expect to close FY11 with in terms of revenue break up?

A: In past history, the majority share of about 50% was mostly in the north and central district. Now, we are looking at a major growth from south and east. We are aggressively marketing ourselves by appointing more distributors and dealers besides openings retail outlets in a bigger way. Growth in terms of percentage will be higher in the south than in north. We already have enough presence in north and now we require presence in other areas.

Q: There has been a further increase in oil prices and raw materials. Are you anticipating any kind of pressure to show up in your margins? What's your expectation?

A: Our decision will be effective from April 1. Our retail prices will increase to offset the anticipated increase in oil prices or other materials. At the end of the day, the consumer has to pay for inflation in various sectors, which have always passed on. The taxation or burden of raw material prices will increase and we compel to do the same. We foresee a pressure on the oil prices which we have to pass on to the customers.

Q: How much you are looking to raise from April 1?

A: The plan is between 5%-10%, going forward.

Q: Will this mitigate the pressure that you are seeing in your raw materials and margins remain flat? Or would you effect any kind of margin improvement with this?

A: There are two strategies, one is to offset the increase in the raw material cost by way of price increase and the other is to make more margin, as expanding the network would require more capital. We will generate more funds at the bottomline. This will happen when we go for a price increase. As a brand, we can command that kind of price increase.

Q: You mentioned about your domestic presence and a strong growth. How are exports doing and what's your plan there?

A: Last quarter, we saw a growth about 20%. This number will continue as we are still getting lot of good inquiries. We see a positive trend in exports. As the Chinese pressure is building up, a lot of customers are looking at India as their next outsourcing destination. The industry as a whole will be more prosperous in terms of exports. Liberty will be probably the biggest beneficiary.