Foot-loose

Calcutta, April 28: Bata India’s first-quarter loss escalated 122 per cent to Rs 14.6 crore compared with Rs 6.57 crore loss in the corresponding previous period.

The losses came in spite of a restructuring that saw some of its key operations shift from Bengal to the northern region in a bid to give sales and profitability a leg-up.

Sales inched up 6.26 per cent to Rs 162.86 crore in the first quarter against Rs 153.35 crore in the previous corresponding period.

The retail division has grown 8 per cent which has helped in achieving an overall growth of 6 per cent. Profitability for the quarter would have been better than the corresponding period last year but for an aggressive clearance action resorted to by the company to declog slow-movers from the system and pave the way for new merchandise.

The company has floated a voluntary retirement scheme to reduce the headcount by 1,500. Bata top-brass feels the rationalisation exercise will increase the productivity of its factories which will subsequently be reflected in its performance.

The loading of the captive production units has also been streamlined to ensure that articles produced by factories are strictly in tune with customer demand.

High input costs coupled with higher advertisement accruals have affected the company’s profitability. All these put together have cost the company Rs 9.9 crore.

The company will appeal to the Supreme Court against the Calcutta High Court’s order on the demerger of production units at Faridabad and Mokamehghat under Section 391 and 393 of the Companies Act, 1956, into Fashion Shoe Private Ltd and BDCL Enterprises Pvt Ltd.

The first quarter financial statement includes the results of the two units.