Footwear major Bata will remain conservative on capital expenditure and expansion as the pandemic-induced lockdown has affected demand for shoes and led to a decline in footfall at the company’s retail stores.
With more than 1,500 stores, Bata will evaluate the expansion of its own stores and prefer to go more for the franchisee model.
In manufacturing, the company had invested around Rs 11 crore for the upgradation and modernisation of its manufacturing unit at Batanagar in Bengal last year. But unlike the usual capex spend, the focus this year would be on managing the existing capacity of 21 million footwear pairs per annum along with cost control initiatives.
The company is also realigning its product offering to cater to the increasing demand for open and washable footwear and expanding its e-commerce presence.
“A substantial part of the renovation and modernisation is done. The situation right now is unique. We have capacity available and at the same time we don’t want to lose out on the surge in demand when the market recovers,” Ashwani Windlass, chairman of Bata India, told The Telegraph on Thursday, adding that the company would not go “too boldly out” for capex at present.
Addressing shareholders at the annual general meeting of Bata India, Windlass said, “Given the social distancing norms and the shift to work-from-home, there would also be an impact on lifestyle products and, accordingly, on the company,”adding that the actual demand recovery will be concurrent with the overall economic situation.
“There is still some more time to go before we can see a complete reinstatement of pre-Covid state of affairs,” Windlass said.
The company, however, remains optimistic about the end-of-season sale and the upcoming festive season with expectations of higher footfall.
“Our omni-channel home delivery offerings cover more than 900 stores pan India. We are continuously ramping up our online presence across India. We have also realigned our product offerings to cater to the demand for open footwear and washable footwear,” he said.
