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.
âThere 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, âsaid 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. âIf it is equity, there is potential for expansion and therefore their franchise is also important,â Shah said.
âWe 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, âadded 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. âMost 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, âhe 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.
âIn the last few months, especially since the start of the holiday season, we have seen subways and shopping centers coming back,â 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, âThere were avenues of sales that had stopped. But simultaneously, several avenues have opened up, âhe said.
While the company has worked on increasing the digital interface with customers, it has also prepared for their return to the store.
âAt 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, âShah said.
The basic theme that Bata followed during the pandemic, Shah said, was about empathy with employees while maintaining agility and readiness.