NEW DELHI — Bata India, already a leading player in the Indian footwear market, has embarked on a new strategy: to open 70 stores a year and for them to be larger units of about 3,000 square feet. Nonviable stores will be closed.
Bata, which according to industry figures has more than 25 percent of the branded shoe market in India, will also have a new managing director beginning Oct. 1. Rajeev Gopalakrishnan will succeed Marcelo Villagran, who has been at the helm of the company for the last six years. Villagran, who is from Chile, will become group managing director responsible for the Latin American region. He is credited with turning around the company in India, where it had been floundering with three straight years of losses.
Gopalakrishnan was previously managing director of Bata Thailand and Bata Bangladesh.
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In 2010, Bata India had a total turnover of 12.77 billion rupees, or $268 million at current exchange, compared with sales of 11.12 billion rupees, or $234.3 million, in 2009.
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According to Research and Markets, the footwear industry in India is the second largest globally in terms of production after China and is dominated by casual footwear, which makes up nearly two-thirds of the total retail market. The footwear market in India is worth about $5 billion a year and will continue to grow at more than 9 percent a year until 2014, according to research estimates.
RNCOS, a research company, has noted that the footwear industry is dominated by the men’s segment, which represents 58 percent of sales, followed by women’s at 31 percent and children’s at 11 percent. “However, the consumption trend is expected to shift more towards the women’s and children’s footwear market,” the company said.
Restructuring has been a focus for Bata over the last few years as it changed course by closing and revamping stores, opening larger format units. It now has more than 1,200 stores in 500 cities throughout India.
Bata has a long history in India, starting out as Bata Shoe Co. Pvt. Ltd. in 1931. Three years later, a foundation stone for its first building was laid. It soon became a township called Batanagar. The company went public in 1973 and its name became Bata India Ltd.
“The company is playing a bit of a gamble,” said independent analyst Ramesh Kurien of the new strategy. “It has a great strength in the value segment and has now been focusing on the more premium customer with the Hush Puppies and Weinbrenner.”
The company continues to expand its premium offering and has opened five Hush Puppies stores and four shop-in-shops with department stores such as Lifestyle & Central in various locations. Bata also launched new designs in performance shoes under the Power brand and a variety of designs in attractive colors for children under Bubblegummers and Baby Bubbles.
Over the last few years, the youth market in India has become a major target for international brands such as Reebok, Nike, Adidas, Woodland and Lee Cooper.