Bata eyes expansion

Bata India, the country's largest shoemaker, today said that it intends on spending between Rs 150-200 crore over the next three years to expand its nationwide footprint through large retail outlets, typically not averaging below 3,000 square feet in size.

“Last year, we spent about Rs 35-40 crore on new stores and renovation. Over the next three years, Rs 150-200 crore will be spent on new stores and renovation. Overall, we have seen that bigger stores provide better turnover so we will attempt to focus on these,” Bata India chairman PM Sinha said.

Equipment and production facilities could also benefit from the expansion fund, most of which will come from the company's profits, Sinha explained, adding that profitability has increased by 40 per cent in recent years.

 

At present, Bata India has over 1200 stores across the country. “We have 24 'cash drained' outlets. We will hopefully close them this year,” Sinha said. This year, the shoemaker plans to add about 70 new stores nationwide, most of which are likely to be large format stores of not less that 3,000 square feet.

“Some stores can be much larger or a little smaller. Rental prices have moved up since last year and this is an area of concern. We are looking at long-term negotiations,” he added.

The firm, which has five manufacturing facilities in the country, is also optimistic about its foray into the safety foot-wear segment.

“We have started and it is doing well. Large number of orders has been received, and some investments will have to be made in order to service the defence (forces) and other industries,” Sinha said.

On the company's real estate venture at Batanagar in West Bengal, he said that the project was “progressing well” and the shoemaker had received “the predominant portion” of a Rs 100 crore sum after a stake rejig in the special purpose vehicle undertaking the development.

In 2005, Bata India had combined with Calcutta Metropolitan Group to develop an integrated township comprising residential and commercial portions across 262 acres on the southern western edge of Kolkata.