‘Investment appetite remains; no price hike in short-term’
Bata India on Tuesday said while it anticipated only need-based shopping in the short-term, revival in demand is expected around the festive season beginning September this year.
The shoemaker posted a close to 57% drop in net profit for the January-March 2020 quarter. Amid COVID-19-related uncertainties, the company has put on hold plans to open any new stores in the next three-six months; however, it has curated a new product line up ‘to stay relevant’, including washable footwear and antiviral masks. “I do expect us to go through a short phase where people will stick to essentials for example children outgrowing shoe size or replacement because of usage, sports shoes for training at home… the festivities as they come in September onwards, will be a big kick for us as a full industry,” Sandeep Kataria, CEO, Bata India, said.
Mr. Katari added that over the last three weeks, the company had seen an uptick in demand with tier 3, tier 4 and tier 5 towns and in residential areas recovering faster. Bata India is also focussing on e-commerce to reach out to customers.
To a query on capex, he said, “We’ve had a relook at that. We are not planning to open any new stores in the next three to six months… the capex and the investment appetite for India is very much still there. But we do need to fully understand how the demand unfolds before we go back and look at new stores.”
Mr. Katari said that the company is not looking at offering discounts in order to avoid crowding at stores, nor will it hike prices in the “short-term” to offset increase in costs due to new safety practices.
With inputs from The Hindu