Footwear major Bata plans to further build on its retail distribution milestone in 2023-24 with fresh additions primarily through capital-efficient options such as franchises and shop-in-shops. The company hopes to touch the franchisee stores mark of 500 soon from the current 419.
With stable raw material prices, the company has also taken a pause in price increase after a 15-20 per cent average rise in prices of footwear in FY23. However, the company's strategy to premiumise its portfolio would continue.
Bata operated 2053 stores pan India in FY23 and sold 48.46 million footwear pairs.
"Last year we made a leap forward with our retail footprint crossing the 2000+ milestone for the first time and I don't think this year we would be slowing down. The fresh additions would be through a combination of company-owned-company-operated (COCO), franchise as well as shop on shops. At least 80 per cent of the additions will be through capital-efficient models. Last year we added almost 120 franchise stores and we are planning for even more aggressive numbers this year," Gunjan Shah, managing director and CEO, Bata India Limited told The Telegraph.
Last year Bata renovated about 147 stores and will have similar numbers this year as part of the company's strategy to evolve, expand and be efficient.
The footwear industry was impacted by a combination of a hike in GST rates below Rs 1000 and raw material inflation leading to a price increase.
"Consumers have been burdened by significant inflation and price increase and I think with raw materials giving us some breather, we would like to make sure we start offering value back to consumers and get more volume-driven growth. Our premiumisation strategy however continues," Shah said.
He added that the company has expanded its services offering in the form of insurance for shoes, by now pay later and e-wallet among others.
Ashwani Windlass, chairman and independent director of Bata India Limited told shareholders at the company's 90th annual general meeting on Thursday that the company's commitment to refreshing its product portfolio with the strategy of casualisation and premiumisation has ensured revenue growth and profitability.
"This was driven by targetted higher average selling price and expansion in market share of our premium category brands like Hush Puppies, Marie Claire and Red Label," he said.
The company has also amended the dividend policy to offer a stable 60 per cent of distributable profits every year.
"Last year we had given a special dividend and we had promised that we would review our dividend payout policy taking into account our own requirements internally and whatever capex is being put in place. This year we have revised our dividend policy," he said.