Marco Capello, the new owner and chairman of Liberty, has outlined plans to scale back the department store’s brands to focus on increasing its depth of offer.

Capello, who completed the £32m acquisition of the iconic department store last week via his BlueGem Capital Partners investment vehicle, said he would not alter Liberty’s position as a retailer of avant-garde fashion and emerging design talent, but that he would focus on increasing sale densities with a slimmed down and focused brands offer.

Capello said: “We need to reduce the offering and make it more authoritative to sell it well. Do we really need to have all of those brands? My personal bias would be to have less brands with more depth and more authority.”

Capello, who will complete a review of the business in July, said he did not yet know whether Liberty would introduce a more mainstream range to cater to price-sensitive shoppers but added that tourists - one of three key Liberty customer groups - would respond to a lower-priced offer.

He said the store would also flex its offer to cater to its established customer - with a penchant for its fabrics and scarves - and its fashion forward customer.

“One of the first things we have to look at is: are we allocating the right amount of space and what do they [customers] want?” he said.

Capello added that Liberty would continue to collaborate with designers and retailers. An exclusive Manolo Blahnik collaboration will launch in September, when the store will also open a larger scarves room.

Capello, who is investing £8m to improve systems and merchandising, has vowed to return the department store to profit by 2011. Last year, losses before tax were £4.5m.

Former buying director Ed Burstell has become managing director while chief executive Geoffroy de La Bourdonnaye has returned to Paris but remains on the Liberty board.