A Patriarch Still On His Feet

Czech-born, he inherited the family's industrial conglomerate after his father died in an air crash in 1932. With the help of relatives, he transferred the business to Canada ahead of the Nazi occupation of Czechoslovakia.

His forefulness transformed Bata into one of the world's biggest footwear makers and retailers. By the late 1980s, Bata employed 70,000 people in 40 shoe factories, tanneries and rubber processing plants, and 6,300 shoe shops around the world. In its heyday, the group produced and sold 300 million pairs of shoes a year.

But the last few years have been difficult, and much of the blame has been directed ast the man who describes himself as the interfering patriarch Bata himself. The organisation has shed more than a fifth of its retail outlets. A large subsidiary in France has sought basnkruptcy protection. And an 800-store chain in the US filed for protection from its creditors last February, less than a week after Bata sold it for a nominal sum.

 

Bata India, with 1,200 outlets, has been in turmoil after big losses.

For decades, Bata had a winning formula: company-owned factories churning out cheap, sturdy shoes sold through Bata shops. The strategy was especially successful in unsophisticated third-world markets where there was little competition.

But the formula became increasingly costly in western Europe and North america, where upstarts such as Nike, LA Gear and Reebok wooed consumers with distinctive brands, flairful marketing, and constant switching of suppliers.

Bata might have dealt with its problems in private, which is how Tom Bata prefers to do things, if not for an internal upheaval. Ironically, the turnmoil centred on a team recruited in 1994 and 1995 to sharpen the group's competitive edge.

Six of the seven recruits have quit. They include the chief executive, chief financial officer, head of European operations, senior vice-president of human resources and vice-president of business development.

Peter Legg, the former human resources chief, laid the blame squarely at Tom Bata's door in a lawsuit earlier this month. Legg's statement of claim alleged that, despite earlier assurances to the contrary, Tom Bata was desirous and insistent on continuing to control and direct the day-to-day operations of Bata.

Legg recounted an incident in October 1995 shortly after the replacement of the then chief executive. Stanley Heath, by Rino Rizzo, a long-time Bata employee. Rizzo outlined his plan for success (which) in substance was a return to the past6 practice at Bata and in complete disregard for the mandate and plans of the senior executive team. The plan reflected the stated views of Bata who interjected and elaborated on the plan as it was being introduced by Rizzo.

Directors of Bata's holding company, who include several prominent European and North American executives, have commissioned a full review of strategy. The betting is that the review will reach the same conclusions as the recently ousted management team. The question is whether the owners and existing managers wil wantor be ableto implement them.

Outsiders also wonder what will happen when Tom Bata finally lets go of the reins. His son, Tom Jr, failed to impress during a seven-year stint as chief executive from 1987 to 1994, while his three daughters sit on the boards of Bata subsidiaries but play no active part in operations.

Much could depend on Tom Sr's Swiss-born wife Sonja12 years his junior and every bit as energetic and forceful. Sonja Bata is a director of several out-side companies, including alcan, the aluminium producer.