Bata India set for rapid expansion

    Bata India set for rapid expansion

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    After turning around an ageing giant that was when he took it over six years ago, has started the second part of his unenviable mission – to rejuvenate the 80-year-old shoe brand to make the 20-25 olds, and even the teens, fall for it.

    Ever changing market and consumer behaviour are the biggest challenges: President, South Asia, Bata
    The company reported stand alone net profit of Rs 50.49 crore for the first quarter ended June 30 as compared to Rs 50.18 crore in the same period last year

    “If the last five years were all about consolidation, the next five years will be all about expansion,” says the Bata India MD and CEO, who transformed the company from a point of bankruptcy when he took over six years ago to one of the most profitable operations of the Swiss multinational globally.

    Bata will introduce almost four designs every day, open 70-100 stores of at least 5,000 sq ft every year, and push its online sales to shed its image as a low-cost functional footwear brand that appeals to the 40-plus age group.

    It’s an uphill task for a brand known for its sandals and entry-level shoes.

    But going by how Villagran has changed the company since taking it over in early 2005, Bata has all the rights to believe in a rival’s tagline: Impossible is nothing.

    A soft-spoken astute Spanish in his late 60s, Villagran closed hundreds of unviable stores and spawned them into large-format outlets, overhauled product portfolio with the help of Bata’s global design centre and refined manufacturing and sourcing strategies, to help Bata come out of three years of continuous losses that peaked at 62 crore in 2004 and steadily grow since then. In 2010, its net profit rose 42 per cent year-on-year to 95 crore.

    Villagran, who has spent almost four decades in Bata, led this transformation from the front. He is usually the first to enter office and the last to leave. And he travels extensively around the country to implement his agenda.

    “Turnaround is just a financial word. What is more important is how the organisation has been completely able to reinvent itself,” he says.

    Experts believe Bata will need to do much more to win over the youth.

    “The brand has already suffered a lot and still carries the old baggage of a low-cost, functional, daily-use ration shop imagery,” says brand expert . “To shed this imagery, it will need to continue to do what it is doing with a greater thrust. Such changes in consumer perception requires sometime,” he says.

    Villagran, however, says the consumer perception towards the brand is already seeing a change and the youth interest is also making a comeback.

    NEW RETAIL REALITY

    So, how did Villagran, who had a successful stint in Chile before coming to India, change Bata here?

    The first thing he did was to adapt the Bata stores in line with the changed retailing landscape with the arrival of malls and big retail chains.

    Bata stores during the 2005-06 would remain closed on Sundays and most would down shutters by 6 in the evening. , a key member of Villagran’s turnaround team, says 40 per cent of Bata outlets were unviable and 90 per cent of them were not renovated for a long time. “These stores were generating minimal sales that they were not even profitable,” he says.

    Source : Economic Times