Leading shoemaker Bata India on Tuesday said about half of its retail outlets are operational now and it expects a revival in demand by September with the onset of festival season.
With the prevailing COVID-19 situation compelling companies tweaking business strategies, Bata too has put expansion plans on hold but is working on growing its e-commerce footprints and also taking help of WhatsApp to reach the doorstep of customers.
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"More than 50 percent of our stores are operational, whether they open for a few hours in day or few days in a week as per the local considerations," Bata India CEO Sandeep Kataria told reporters in a video conference call.
According to him, the demand has been rising for the last three weeks and expects the trend to continue as consumers start feeling more confident.
Besides, the company has also renegotiated terms and conditions with almost half of its property owners, granting waiver in the rentals for the lockdown period and revised agreements till the company is able to get back to a stabilised demand.
The sales recovery rate at outlets in residential areas and smaller tier II, IV and V markets are higher and has almost returned to the pre-COVID levels, however, the company expects its high street stores to take a longer time to recover.
"Demand is moving up, we are tracking on a week to week basis, it varies significantly based on type of stores and the part of the country. High street stores are taking longer while those in residential complexes are bouncing back better. Once the official lockdown is over, we will be in a better position,” said Kataria.
The company, he said, also expects online order to go up as consumers would hesitate to step out in the initial phases and it is already witnessing an escalation in the number of orders from its website and is also strengthening its operation and integration with existing stores.
Bata, along with its own portal and various channel partners, is also giving customers the option to shop from homes via WhatsApp chat with its neighborhood stores.
"We are not planning to open any new stores in the next 3 to 6 months,” said Kataria adding that "capex and investment appetite remains strong for India, we need to see how demand unfolds. Incomplete projects will be completed, however, not looking at expansion right now."
Over any possible change in prices due to increase in operating costs, he said: "We do not plan to take pricing up in short term as things settle down and post that we will be revisiting and re-looking.”
While talking about margins, Kataria said the company is maintaining its prices and not having any promotional offers.
“We are not discounting. Our intention is not that get consumers to rush back into the stores because it needs to be controlled,” he said adding that this is pursuance of the government direction to have limited number of employees and consumers at the stores.
The company is also working on various cost-optimisation measures including rental renegotiation, closure of unviable stores and digitalisation drive across the organisation, etc to eliminate redundancies.
On demand pattern, Kataria said "it would change, as we go through different phases of recovery."
"Initially, people would be little hesitant but as they get more confidence, they would move up and I am sure by the time of the festivity, in the later part of the year, we should be even in a better shape,” he said.
While, Bata Group CFO Alberto Toni said that though the business has been impacted because of COVID-19 and subsequent development, it would continue to invest in the India markets.
Moreover, Bata India has introduced two new collections during the pandemic claiming it to be “relevant”. It has introduced 'work from home' collection of shoes and easy wash footwear, which can be washed from soap. Besides it has also introduced foot disinfecting spray and surface sanitising wipes, to be made available from June.
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