NEW DELHI : Bata, India’s largest footwear retailer, mentioned it should leverage the franchise mannequin to develop in India’s smaller cities and huge cities apart from tapping its distribution arm to promote extra footwear by means of multi-brand shops.
“We’re considerably shifting to the smaller cities and perhaps even suburbs or metros to a franchise mannequin. That provides us much more flexibility in addition to leverages the entrepreneurship in India. That’s given us nice traction. Final two quarters, we’ve been including virtually 20 to 30 shops each quarter. And hopefully that tempo continues and perhaps accelerates going ahead,” Gunjan Shah, managing director and chief govt, Bata India Ltd, mentioned in an interview.
Shah assumed his present position in June 2021. The corporate that sells footwear underneath the Bata, Bata Pink Label, Hush Puppies, Naturalizer, Energy, Marie Claire, Weinbrenner, North Star, Scholl, Bata Comfit and Bubble gummers manufacturers, retails through 1,700 Bata owned shops, shop-in-shops and franchisee shops and in 1000’s of multi-brand footwear seller shops pan-India.
Shah mentioned the corporate has additionally expanded its footprint to succeed in extra customers by means of multi-brand shops.
“One other pivot of the enlargement of footprint has been principally multi-brand retailers. So we’ve bought a distribution arm and that takes us to virtually 20,000-25,000 multi-brand footwear outlets. That distribution arm now takes us to virtually 1,000 plus cities. It’s ramped up from lower than 800 cities a few yr again,” he added.
Shah mentioned company-owned shops will broaden as nicely, “it’s simply that there’s disproportionate enlargement occurring within the franchise mannequin.”
Late final month, the footwear retailer reported a doubling of March-quarter revenue to ₹62.9 crore. Consolidated income from operations rose 12.7% to ₹ 665.2 crore from ₹589 crore a yr earlier, it mentioned.
In FY22, Bata added greater than 80 franchised shops to faucet customers in tier III and smaller cities. It has greater than 300 franchise shops that account for 18% of its retailer community. Over the following two years, Bata is aiming to extend the franchisee retailer share to 30%, analysts at ICICI Securities mentioned in a Might report on the corporate.
In an announcement on its March quarter earnings, Shah mentioned sneakers led the expansion restoration within the quarter whereas formal and trend classes additionally recovered considerably. “We continued upshift in advertising investments with campaigns like Limitless Sneaker…,” he mentioned. Quite a few new sneaker studios have been launched, the corporate mentioned, and the Limitless sneaker marketing campaign drove the brand new portfolio resulting in a rise in sneakers and casuals fashion contribution to the general gross sales combine.
Shah mentioned the corporate is specializing in extra informal footwear and including extra sneakers to its vary because the pattern has develop into extra mainstream.
“That’s been a giant thrust space for us. We’ve began a acutely aware effort in direction of ensuring our portfolio strikes consistent with shopper tendencies. In our shops, let’s say, from a few yr again or perhaps even eight months again, there’s a giant change within the portfolio. There’s much more sneakers to be seen. We’ve revamped quite a lot of our informal portfolio,” he mentioned. Informal footwear is now roughly half of the corporate’s portfolio, he mentioned.
The retailer, which is seeing provide constraints for uncooked supplies similar to polyurethane, mentioned it took worth hikes of 7-12%.
“I feel inflation is right here to remain. It began exhibiting or rearing its head someplace in Q2 of final yr. We’ve achieved fairly nicely on our margins and I feel one of many issues that helped us on this path was that we tightened our belts and tried to extract value efficiencies on numerous levers…The second piece that we tried was additionally enhance on the product combine and subsequently push among the higher-margin merchandise,” he mentioned.
Supply: Live Mint