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NEW DELHI : Bata, India’s largest footwear retailer, said it will leverage the franchise model to grow in India’s smaller cities and large towns besides tapping its distribution arm to sell more footwear through multi-brand stores.

“We are significantly moving to the smaller towns and maybe even suburbs or metros to a franchise model. That gives us a lot more flexibility as well as leverages the entrepreneurship in India. That’s given us great traction. Last two quarters, we’ve been adding almost 20 to 30 stores every quarter. And hopefully that pace continues and maybe accelerates going forward," Gunjan Shah, managing director and chief executive, Bata India Ltd, said in an interview.

Shah assumed his current role in June 2021. The company that sells footwear under the Bata, Bata Red Label, Hush Puppies, Naturalizer, Power, Marie Claire, Weinbrenner, North Star, Scholl, Bata Comfit and Bubble gummers brands, retails via 1,700 Bata owned stores, shop-in-shops and franchisee stores and in thousands of multi-brand footwear dealer stores pan-India.

Shah said the company has also expanded its footprint to reach more shoppers through multi-brand stores.

“Another pivot of the expansion of footprint has been basically multi-brand outlets. So we’ve got a distribution arm and that takes us to almost 20,000-25,000 multi-brand footwear shops. That distribution arm now takes us to almost 1,000 plus towns. It’s ramped up from less than 800 towns about a year back," he added.

Shah said company-owned stores will expand as well, “it’s just that there is disproportionate expansion happening in the franchise model."

Late last month, the footwear retailer reported a doubling of March-quarter profit to 62.9 crore. Consolidated revenue from operations rose 12.7% to 665.2 crore from 589 crore a year earlier, it said.

In FY22, Bata added more than 80 franchised stores to tap shoppers in tier III and smaller cities. It has more than 300 franchise stores that account for 18% of its store network. Over the next two years, Bata is aiming to increase the franchisee store share to 30%, analysts at ICICI Securities said in a May report on the company.

In a statement on its March quarter earnings, Shah said sneakers led the growth recovery in the quarter while formal and fashion categories also recovered significantly. “We continued upshift in marketing investments with campaigns like Unlimited Sneaker...," he said. A number of new sneaker studios were launched, the company said, and the Unlimited sneaker campaign drove the new portfolio leading to an increase in sneakers and casuals style contribution to the overall sales mix.

Shah said the company is focusing on more casual footwear and adding more sneakers to its range as the trend has become more mainstream.

“That’s been a big thrust area for us. We’ve started a conscious effort towards making sure our portfolio moves in line with consumer trends. In our stores, let’s say, from about a year back or maybe even eight months back, there’s a big change in the portfolio. There’s a lot more sneakers to be seen. We’ve revamped a lot of our casual portfolio," he said. Casual footwear is now approximately half of the company’s portfolio, he said.

The retailer, which is seeing supply constraints for raw materials such as polyurethane, said it took price hikes of 7-12%.

“I think inflation is here to stay. It started showing or rearing its head somewhere in Q2 of last year. We’ve done reasonably well on our margins and I think one of the things that helped us in this direction was that we tightened our belts and tried to extract cost efficiencies on various levers...The second piece that we tried was also improve on the product mix and therefore push some of the higher-margin products," he said.

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