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Bata goes jogging before the big leap

Calcutta, June 24: Bata India hopes to turn around in the current fiscal after having suffered losses for more than a year.

The company has drawn up a three-year business plan and expects to sell 75 million pairs of shoes by the end of the third year. At present, the company sells 60 million pairs annually. Bata will invest Rs 45-60 crore in these three years.

Addressing a press conference here today, managing director Stephen J. Davies, said: “Bata is taking major restructuring measures to improve distribution logistics, reduce costs, strengthen merchandising and marketing along with the launch of more products. We are working hard to achieve positive results and turn around.”

The company had suffered a loss of Rs 6.57 crore in the first three months from January to March. In the second quarter, the company has witnessed an 8 per cent growth in revenues on a quarter-on-quarter basis, director (finance) P. K. Nag said.

Unveiling the restructuring exercise, Davies said the company is slowly repositioning itself as a marketing company from a manufacturing company. Bata currently holds an 11 per cent share in the Rs 6000-crore organised shoe market.

The company has already classified its 1,300 stores into four categories — flagship store, city store, family store and bazar store.

The flagship stores will showcase Bata’s international range and imported brands. The company will now outsource 40 per cent of its shoes.

The city stores located in the metros will cater to the fashion-conscious middle and high income groups. The family stores are located in high-traffic commercial locations in major towns and will showcase mid-range footwear for the value conscious consumers.

The bazar stores are located in high-traffic and densely populated markets and offer basic and volume brands for price sensitive consumers.

“We have also been able to sort out some internal problems. We are trying to establish a transparent system in our organisation so that we get full cooperation from our employees,” Davies said.

He accepted that the company has to improve quality and focus more on its customers to achieve growth in the coming years.

The company’s plan to demerge its Faridabad factory and Mokamaghat tannery is not going to happen immediately due to some legal wrangles. The company is buying some machines for these units to strengthen its operations.

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