LONDON — Liberty’s new owners have pumped 8 million pounds, or $12 million, into the store and are expecting the business to turn a profit by the end of the current fiscal year.
Marco Capello, managing partner at BlueGem Capital Partners LLP and Liberty’s new executive chairman, said the store’s fortunes lie in its heritage, brand name and current managers.
During an interview at the store on Great Marlborough Street, Capello talked about his reason for buying the business, which includes the London store; Liberty Art Fabrics, which supplies fabrics to brands from J. Crew to Louis Vuitton, and the Liberty brand.
“So much business and industry has moved in the past decades from Europe to the Middle East and Far East,” he said. “Today, what makes Europe strong are its brands, its retail and its financial services. Liberty has two out of three. When we looked at buying it, our board members immediately said yes. It was the easiest decision we ever made.”
BlueGem’s other holdings include The Private Clinic Ltd., which specializes in cosmetic surgery in the U.K.; Fintyre SpA, an Italian wholesale tire distributor, and Management Consulting Group plc, a worldwide consultancy.
BlueGem paid cash for Liberty plc, valuing the store at 32 million pounds, or $48 million at current exchange. Capello said the company will be delisted from the AIM stock exchange.
Capello added he expects the Liberty business to return to profitability in the year ending Dec. 31. Last year, the company recorded a net loss of 5.2 million pounds, or $8.1 million, for the 12 months. He said that in fiscal 2011, he expects all segments of the business to be turning a profit.
Last year, Liberty’s revenues of 59.6 million pounds, or $93 million for the year, up 19.5 percent. Dollar figures have been calculated at average exchange rates for the periods to which they refer.
BlueGem’s 8 million pounds will be invested in IT systems, customer service and loyalty schemes, back office and merchandising.
Capello said the chief executive position has been eliminated altogether, and four managers will run the various business divisions. Ed Burstell, who has been promoted to managing director, Liberty retail, said the store would evolve steadily under BlueGem’s management. Burstell said the store plans to leverage its heritage prints and fabrics and its position as a unique tourist destination.
The scarf room will be moved into the sunny central atrium; a Liberty prints shop will be opened on the third floor, showcasing shirts initially and then other products, and a paper room — with Liberty-branded notebooks and stationery — will open in what is currently the scarf room.
“With regard to the Liberty brand, we want to refocus on the things we can win on: shirts, scarves, ties, stationery. We don’t need to be doing handbags, footwear or jewelry. We want to gain authority in each product category,” he said, adding that he wants to sell Liberty-branded products alongside other brands throughout the store.
Liberty will continue to pursue its collaborations. Earlier this year, the store worked with Hermès on a scarf project, and from September through January 2011, it will collaborate with Manolo Blahnik on a new crop of merchandise. The shoe designer will be selling his own creations — in addition to Liberty-inspired shoes, scarves, bow ties, and Wellington boots — in a dedicated area of the store.
Burstell said the store’s beauty area will be expanded to house more brands and exclusives, while the men’s department will undergo a re-fit this summer, and will get a new, stand-alone denim room and a unisex spa based around feet. “No one owns feet in London,” said Burstell. “We want to be the ones.”
Burstell will be working alongside Sarah Halsall, retail director; Paul Harris, finance director, Liberty, and Kirstie Carey, managing director, Liberty Art Fabrics. Guy Hipwell will remain in charge of Liberty’s online business.