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Photo: Royal Enfield
Photo: Royal Enfield

Royal Enfield to shut down several regional offices amid pandemic

Offices in Gurgaon, Chennai, Bangalore, Mumbai, Jharkhand, Hyderabad, Bhubaneshwar and others will be shut down immediately

MUMBAI: In a cost-cutting exercise while a pandemic rages on, Royal Enfield – the maker of popular Bullet and Classic motorcycles – has decided to shut down about a dozen regional offices, an internal circular issued to employees said. Mint has seen the copy of the circular.

Offices in Gurgaon, Chennai, Bangalore, Mumbai, Jharkhand, Hyderabad, Bhubaneshwar and others will be shut down immediately.

"The admin team has begun the process of renegotiating the terms for an early exit for the remaining RO (regional office) locations, where the lock-in period is beyond one year, but sales, service, apparel employees in these regions will continue on a work-from-home basis," the circular added.

Lalit Malik, chief commercial officer (CCO) at the company, confirmed the development while speaking to reporters on Friday after March quarter results.

"We are looking to shut down some regional offices but people will continue to work from home. This will save a lot of travel time for our regional employees," Malik had said.

The move comes despite Royal Enfield saying that bookings of its motorcycles nearly touched pre-pandemic levels in May and first week of June after the Centre and the states decided to ease lockdown norms.

"Our bookings are looking healthy and overall booking trend is close to normal on a run rate basis. We are quite satisfied at the moment," said Siddhartha Lal, managing director, Eicher Motors, in a conference call on Friday.

Royal Enfield has also said it will continue to expand its dealership network in India and other geographies. About 100 new studio stores were added during the March quarter, taking the total to 600 of such retail stores in FY20.

Vinod Dasari, chief executive officer (CEO) at Royal Enfield, said company plans to add a similar number to its network in FY21.

Royal Enfield’s studio store concept, which is a showroom-cum-service shop with an area of 500-600sq ft, is aimed at reducing break-even cost of operating an outlet and alfor expanding presence in tier 3 and smaller markets.

According to the company, a studio store operates at one-tenth cost of a typical large format store in a metro.

Eicher Motors Ltd, the parent of Royal Enfield, on Friday reported a 12% year-on-year drop in its consolidated revenue from operations at 2,208 crore for the March quarter. The company’s earnings before interest, taxes, depreciation and amortization or Ebidta for Q4FY20 was at 432 crore, down 37% YoY.

Royal Enfield sold 163,083 motorcycles in the March quarter, down 17% from the year-ago period.

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