Bata India will bet on a franchise model for expansion in the near future

Over the next 2-3 years, around 80-90 percent of the big shoe company Bata India’s new store additions will go through the franchise.

“There is a huge margin and opportunity. We see almost 80-90% of our new store additions over the next 2-3 years coming from the franchise, ”said Gunjan Shah, Managing Director and CEO of Bata India, on Friday evening at a fireside chat at the Kolkata Retail Summit. (KRS) 2021 organized by the Retailers Association of India (RAI).

The Bata brand, he said, crosses the country in length and breadth. “If it is equity, there is potential for expansion and therefore their franchise is also important,” Shah said.

“We are looking for entrepreneurs, we are looking for people who believe in the Bata promise as well as the brand. And we get a fantastic response. We envision a significant expansion and as we continue to have our own stores and develop them, we will have an important partnership with local entrepreneurs and retailers to expand the franchise, ”added Shah.

Bata, while reporting its results for the second quarter of FY22, said it continues to expand retail in Tier 3 through 5 cities through franchising, bringing the total to 270+ at this time. day.

During the discussion, Shah pointed out that rural areas are urbanizing very quickly. “Most importantly, their aspirations are increasing dramatically. They are exposed to digital media, disposable income increases and as a result their aspiration for brands and products like Bata increases. In addition, Bata’s equity is already there, ”he said.

Rural and smaller towns have gained ground during the pandemic for most businesses and across categories. But Shah stressed that the holiday season is working well for Bata, and consumer confidence is returning in metropolitan cities as well.

“In the last few months, especially since the start of the holiday season, we have seen subways and shopping centers coming back,” he added.

With the vaccination, consumer confidence was returning and Shah said: “I hope we will continue to pull both engines.”

Bata, at T2FY22, had recorded an after-tax profit (PAT) of Rs 37.1 crore compared to a loss of Rs 44.3 crore in the previous year period. Operating income for the quarter was Rs 614 crore which the company said exhibited a “healthy and consistent” recovery since the opening of the lockdown. It was Rs 368 crore a year ago.

Explaining how the company weathered the pandemic, Shah said, “There were avenues of sales that had stopped. But simultaneously, several avenues have opened up, ”he said.

While the company has worked on increasing the digital interface with customers, it has also prepared for their return to the store.

“At the same time, we were preparing for a time when the wave will be gone and consumers will want to come back to the store. So we made an effort to put the stores in the right place and do the refurbishment if necessary, ”Shah said.

The basic theme that Bata followed during the pandemic, Shah said, was about empathy with employees while maintaining agility and readiness.

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