News: Bata to increase Indian retail presence
(F2F 31/03/2006) Mumbai - After the market was opened up to foreign single-brand stores by the centre for footwear segment Bata India Ltd, the largest shoe company in India, feels the need to evolve new retail strategy in order to face the competition.
The company plans to be more visible in shopping malls, bring in franchisee model and create shop-in-shop experience in a multi-branded store.
Bata needs to bring in innovation to be ahead in competition, said P M Sinha, Chairman of Bata.
Bata has 1100 stores in India at present with plans to open 40 new stores by 2006.
Of the 10 shops opened by the company during first quarter of 2006, five are in malls.
The strategy to create international feel in its new stores along with modernising of the existing ones seems to have been successful with sales growth of 20 to 40 percent recorded in modernised shops, Sinha explained.
The company is undergoing discussions with mall developers for space in the new malls and is looking at pushing sales through flagship stores.
In 2005, it had restricted sales through wholesale channels sales were restricted in 2005 due to very high outstandings resulting into sales going down by Rs 20 crore.
Strict measures and modern stores helped Bata return to the black after three years.
Sinha said, the turnaround was due to bringing down costs and innovative product mix introduced during the year.
Net sales grew marginally from Rs 694 crore in 2004 to Rs 706.7 crore in 2005. Bata was able to make profit of Rs 12.4 crore against a loss of Rs 6.27 crore in 2004. He is confident that sales growth would be more robust in 2006.
Sinha said that, a 10 percent growth in topline would be achieved with profitability posting a better performance than 2005.
The company offered Voluntary Retirement Scheme (VRS) to about 1,000 people in 2005 reducing staff cost.
Manufacturing of products in 2005 was planned keeping in mind market needs, focusing on women’s shoe segment where Bata was historically weak.
Bata has plans to explore opportunities in institutional space like hospitals, hotels and defence establishments.
The company plans to be more visible in shopping malls, bring in franchisee model and create shop-in-shop experience in a multi-branded store.
Bata needs to bring in innovation to be ahead in competition, said P M Sinha, Chairman of Bata.
Bata has 1100 stores in India at present with plans to open 40 new stores by 2006.
Of the 10 shops opened by the company during first quarter of 2006, five are in malls.
The strategy to create international feel in its new stores along with modernising of the existing ones seems to have been successful with sales growth of 20 to 40 percent recorded in modernised shops, Sinha explained.
The company is undergoing discussions with mall developers for space in the new malls and is looking at pushing sales through flagship stores.
In 2005, it had restricted sales through wholesale channels sales were restricted in 2005 due to very high outstandings resulting into sales going down by Rs 20 crore.
Strict measures and modern stores helped Bata return to the black after three years.
Sinha said, the turnaround was due to bringing down costs and innovative product mix introduced during the year.
Net sales grew marginally from Rs 694 crore in 2004 to Rs 706.7 crore in 2005. Bata was able to make profit of Rs 12.4 crore against a loss of Rs 6.27 crore in 2004. He is confident that sales growth would be more robust in 2006.
Sinha said that, a 10 percent growth in topline would be achieved with profitability posting a better performance than 2005.
The company offered Voluntary Retirement Scheme (VRS) to about 1,000 people in 2005 reducing staff cost.
Manufacturing of products in 2005 was planned keeping in mind market needs, focusing on women’s shoe segment where Bata was historically weak.
Bata has plans to explore opportunities in institutional space like hospitals, hotels and defence establishments.
posted by InCar Group Press Room at 15:27
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