Bata says mass category demand hit but sneakerheads are going strong
While overall demand has recovered significantly versus pre-COVID, products priced below Rs 1,000 have seen a hit on sales and this is forty percent of Bata's overall sales basket.
Inflation has impacted the mass end sales for one of India's oldest footwear makers, Bata. However, in an interview with CNBC-TV18, the management said that premium categories, especially the new boom in sneaker sales are going strong.
While overall demand has recovered significantly versus pre-COVID, products priced below Rs 1,000 have seen a hit on sales and this is forty percent of Bata's overall sales basket.
"Premium products would be the rest of the category and out of that, sneakers would be about 20 percent of sales," said Gunjan Shah, MD and CEO of Bata India.
There is no denying that the high raw material cost and weak demand have hit the company’s earnings performance.
“We saw some volume sluggishness in the first half of this year when we bore the maximum brunt of the inflation as well as the price increases that we had to take. However, post that we have seen positive recovery ahead of pre-COVID levels in volumes,” said the management.
When it comes to sneakers, Bata has seen a positive shift along with the market. Sneakers are almost the latest asset class in town for the rich.
Bata had told CNBC-TV18, earlier in the year that it expects sneakers to contribute 30 percent to sales in FY23 and about 50 percent to sales in the next few years.
Also Read | Are sneakers the new stocks? Here is all you need to know and the dos and don'ts of this new asset class
The Bata stock was up 0.88 percent in the last week and down 4.20 percent in the past month.
For the entire interview, watch the accompanying video
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(Edited by : Abhishek Jha)
First Published: Dec 23, 2022 12:17 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
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