Date:28/06/2005 URL: http://www.thehindubusinessline.com/2005/06/28/stories/2005062801880300.htm

Back Bata India lines up slew of measures to ride retail boom

Our Bureau

Kolkata , June 27

BATA India Ltd has planned fresh initiatives to facilitate substantial growth in its retail business in the current calendar year. "We wish to be part of the great retail movement in India," said Mr P.M. Sinha, Chairman.

Addressing shareholders at the company's 72nd AGM today, Mr Sinha said that as part of its retail initiatives, Bata India plans to open new stores, refurbish existing ones, and create innovative product lines.

"Improvement in the quality of service to customers would also be a major focus area," he added.

According to him, the retail sector in India was entering a new phase. With the Central Government considering opening up of the retail sector to FDI, there is immense opportunity for growth in the sector.

Already, organised retail is penetrating rural India through the Hariyali Kendras, the e-Choupal retail chain, and similar ventures.

Mr Sinha said that 2004 was a year of restructuring and re-engineering for the company.

The idea in this regard was to improve the company's long-term and short-term viability.

Steps taken towards this end include restricting sales to wholesalers as a means of recovering old customer dues and modernising 11 stores with a view to improving not just the ambience but to assist customers in selecting the latest designs at different price points.

Sixty unviable stores - "which were cash drain stores" - were closed down even as plans were firmed up to outsource from four manufacturing units in tax holiday States.

While part of the outsourced manufacturing is already routed through tax holiday States such as Himachal Pradesh and Uttaranchal, the company is exploring third party manufacturing units in other tax-free States such as Assam and Jammu & Kashmir.

Mr Sinha said that in order to revamp wholesale operations, a separate shoe line would be created.

This would be for the mass market and would give a distinct identity to the company's wholesale merchandise.

Bata has also started the process of restructuring its commercial activities for a more effective implementation of its plans for 2005 onwards, with a more rational deployment of manpower.

The company is also undertaking a rural marketing thrust - "where the market is growing faster than in urban markets" - he said, adding that the initiatives taken in 2004 "should start to yield positive results in 2005 and 2006."