homebusiness Newscompanies NewsBata enters apparel business as sneaker demand continues to drive growth
Bata enters apparel business as sneaker demand continues to drive growth
Bata India's premiumisation strategy and focus on sneakers have helped the company to achieve steady growth. With the addition of franchise stores, the company's revenue has been impressive. While weak demand has been observed in the below Rs 500 and Rs 1,000 categories, the company's focus on higher price points has helped to drive revenue. Bata India's entry into the apparel business is a sign of its ambitions to expand and leverage its retail presence.
Bata India, one of the country's largest footwear retailers, has been in the news lately for their strong push to be a recognised player in the sneaker business as the category continues to grow rapidly in India. Now, the footwear maker has decided to set foot in the apparel business to leverage its retail presence, even as it eyes sales of Rs 5,000 crore by fiscal 2025.
In an interview with CNBC-TV18, Gunjan Shah, MD and CEO of Bata India, explained that the company's premiumisation strategy is working well. Revenue has been driven by price points above Rs 1,000 and Rs 2,000, while weak demand has been observed in the below Rs 500 and Rs 1,000 categories.
“The premium section of the business which is in the price points of Rs 1,000, Rs 2,000 and even higher is doing well and is leading the growth for us. However, there is a certain amount of sluggishness that we see in the price points, which are below Rs 1,000 and below Rs 500,” he said.
The focus on sneakers has been a significant driver of growth for Bata India. The company has been quick to respond to changing consumer preferences, and its focus on sneakers has paid off.
Shah also shared that the company has not taken any price hikes in the last six months.
Bata, on Tuesday, reported a 15 percent year-on-year (YoY) increase in net profit at Rs 83.1 crore for the third quarter that ended December 31, 2022. Total revenue stood at Rs 900.2 crore during the period under review, up 7 percent.
The company's revenue growth has been impressive, with the highest number of franchise stores added in quarter three.
In addition, the company has been maintaining its marketing spends at current high levels. These moves have paid off, and the company is now looking to expand into the apparel business.
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The company is also aware that it cannot rest on its laurels and must continue to innovate and adapt to changing trends in the industry.
Bata India has always been known for its footwear, but the company is now looking to leverage its retail presence to enter the apparel business. Shah shared that the company is looking to share more details on this foray in a few months.
The stock was down 3.59 percent in the last week and 7.01 percent in the past month.
For more details, watch the accompanying video
(Edited by : Abhishek Jha)
First Published: Feb 16, 2023 1:59 PM IST
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