 "Bata")
Faced with intense competition, footwear major Bata India has reworked its strategy and will now focus on ramping up existing business rather than expand network.
"The company has changed its strategy of opening 100 plus stores every year and is now concentrating more on achieving same store growth. It had opened 26 retail stores in the last fiscal," Bata India Chairman Uday Khanna said at the company's Annual General Meeting.
The company would invest in the existing stores to ramp up sales and use of technology would be one component as it found sales from new own stores not so remunerative due to intense competition as compared to rentals it spends on the stores, Bata India officials informed.
However, Bata India would promote expansion of stores in franchisee model which was experimented with 30 stores in the states of Madhya Pradesh, Uttar Pradesh and Gujarat.
"We want to have some 200 franchisee stores in the next 2-3 years," its managing director Rajeev Gopalakrishnan said.
These would be focused more on tier II and III cities, beside the company could also open around 50 stores during the year.
Bata was considering to focus on smaller and rural markets and may undertake sub-branding, but the plan was not firmed yet, the officials said.
Bata Director, Finance, R K Gupta said the company was trying to evaluate 40-50 inviable stores and they might be closed down if turnaround could not be achieved.
Speaking on the goods and services tax, he said that up to 18 per cent of rate tax implications on Bata would be neutral.
