Bata sees profit ahead, eyes $200m sales in 5 years

Shoe major Bata India Ltd (BIL) is confident of trekking back on to the profit track this year and has targeted $200 million turnover five years down the line.

"With focus on marketing, and expansion on the agenda, we hope to make profits this year. In five years, the company hopes to clock a $200 million profit," explained Stephen J Davies, managing director BIL in an exclusive interview to Business Standard.

Talking about expansion plans, Davies said Bata had firmed up plans of setting up 50 flagship stores that would provide unique shopping experience to customers. To begin with, Bata would open a 2,000 square feet flagship store.

These will be markedly different from other high-end stores that Bata runs at present. All these outlets would be located in metros and larger cities.

Bata has engaged a property expert who would advise the company on properties it could consider for the new flagship stores.

Outsourcing was also high on Bata's priority. At present as much as 30 per cent of all shoes sold by Bata through retail stores was outsourced. As much as 55 per cent of shoes sold through the wholesale division were manufactured by BIL.

"Bata will be manufacturing at its existing factories but only those types in which the company was very good, and will be outsourcing the rest, either from domestic producers or from abroad," Davies explained.

"The company had recently imported accessories from China to cater to the competitive ladies footwear market in India. The existing manufacturing units would be producing mass products while niche ones would be imported outside, be it from overseas manufacturing units of Bata or other sources," he added.

"In India, products like Sandak for the masses has been a success and we will continue manufacturing these," Davies pointed out.

Talking about the wholesale division of Bata India, Davies said, "This division had lost its distinction and focus over the last few years. The division has been selling products which were also being sold through the retail division and did not stick to the rules of the wholesale trade."

The company has renewed its focus on rural marketing. The marketing team from the rural division will try and penetrate a larger area of rural India.

"The company would also look at institutional sales like hospitals and the hospitality industry where certain specifications exist and we can compete both on the price as well as the quality front", he said.

The thrust on rural sales has led Bata to deploy an increased number of marketing executives outside the cities.

The aim was to capture a sizable portion of the rural market in the next few years with the target being 20 per cent annual growth in sales.