Bata India to focus on expansion in small towns, online channels

This is part of the firm's efforts to save cash through enhanced productivity, cost-reduction and tight inventory management

Footwear major Bata India will focus on expansion in small towns and online channels as part of its efforts to save cash through enhanced productivity, cost-reduction and tight inventory management to overcome the challenges of the pandemic, according to its annual report for 2020-21.

The company has adopted 'Survive, Revive, Revitalise and Thrive' strategy and is constantly monitoring the store level performance, driving sales through online channels and cost optimisation across all functions.

"With India recovering from COVID wave 2, our priorities will revolve around safety and security of all our stakeholders...," Bata India Managing Director Rajeev Gopalakrishnan wrote in his address to shareholders.

To overcome the challenges posed by the pandemic, he said Bata India is focussing on "conserving cash by bolstering productivity across value chain and tight inventory control, driving margins via cost-reduction projects and achieving higher turnover by small-town and online channels expansion".

In 2020-21, he said the closure of malls and high street stores triggered by lockdown led to the company's sales taking a severe hit.

"As a result, it became paramount for us to employ cash-saving measures," Gopalakrishnan said adding through astute planning and cohesive collaboration, the company saved "more than Rs 100 crore on account of rent negotiations, vendor cost negotiations and consolidating office spaces".

He further said,"we also implemented 'Project Thrive' to reduce dependency on imports and shifted to local sourcing. Owing to 'Project Refuel', a product COGS (cost of goods sold) -saving initiative, we were able to save over Rs 7 crore during (FY) 2021."

Stating that with COVID-19 infections surging in bigger metros and prolonged lockdowns, customers started looking for trusted brands, he said,"Therefore, we continued to expand our retail network through franchise channel. We opened a total of 64 franchise stores in smaller towns and cities, taking the total to 220 franchise stores."

The company also scaled up its presence via distribution channel, with Bata products now available in over 800 towns across 25,000 multi-brand outlets, Gopalakrishnan said adding,"We also opened 18 new company-owned stores."

Bata India Chairman Ashwani Windlass said "the second wave shook the country even harder. Expectedly, revenues for the year remained subdued due to marked decline in demand for formal wear but your company's confidence on the path forward remains high."

On the outlook, the company said the current economic state, challenging retail environment and new waves of pandemic pose threats to businesses across all sectors.

"The countrywide lockdowns and the 'New Normal' has led to fundamental shift in customer behaviour and retail businesses in particular".

The company "is focused on 'Survive, Revive, Revitalise and Thrive' strategy and is constantly monitoring the store level performance, driving sales through online channels and cost optimisation across all functions", it added.

Bata India said it is strategically positioned to harness the present challenges, given the strength of its brand, innovation capabilities, retail foothold and growing online presence in footwear and accessories category.