Bata India Ltd has outlined a broad distribution and merchandising overhaul aimed at reviving growth, with the company targeting nearly 1,000 franchise stores and expanding its Zero-Based Merchandising (ZBM) programme across its company-owned outlets.
The strategy was detailed during the company’s Q4 FY26 earnings call.
Shares of Bata India were trading at Rs 671.65, up 0.5 percent from the previous close of Rs 668.30. The company has a market capitalization of Rs 8,632.55 crore and trades at a P/E ratio of 64.
ZBM rollout gathers pace
Bata’s Zero-Based Merchandising programme, which uses demand data to determine product assortments, covered 550 stores during Q4 FY26.
By May 2026, the programme had been expanded to 700 stores.
Management plans to increase the number to 800-850 stores by the end of the next quarter, covering around 75-80 percent of the company-owned store network.
The company said ZBM stores have delivered a mid-single-digit comparable growth advantage over the rest of the network.
Company-owned (COCO) stores account for:
- 65 percent of total revenue.
- Around 70 percent of COCO turnover through larger-format stores.
Franchise network heads towards 1,000 stores
During the quarter, Bata’s franchise network crossed 700 outlets, taking the total number of exclusive brand stores beyond 2,000.
The company is targeting close to 1,000 franchise stores over the next 12 months.
The franchise model follows a FOFO (franchise-owned, franchise-operated) structure.
This allows expansion without lease rental obligations.
Franchise stores currently contribute a double-digit share of total revenue.
Bata’s multi-brand distribution network now covers 1,670 towns.
Value segment shows signs of recovery
The sub-Rs 1,000 footwear category, which had faced pressure over the last three years, stabilized during the latter part of Q4 FY26.
Management said the segment returned to growth in line with broader value trends.
The value portfolio accounts for 35-40 percent of the company’s revenue.
Digital business expands
Online operations continue to grow.
Digital channels contribute around 8-12 percent of overall business.
Key highlights include:
- bata.com recorded 81 percent year-on-year growth.
- The website contributes 14 percent of the company’s online sales.
- More than 700 stores currently serve as fulfillment centres.
- The number is expected to rise to 1,000 stores.
Inventory efficiency improves
The company has reduced inventory levels over the last two years.
Key metrics:
- Absolute inventory reduced by 28 percent.
- Floor availability improved by 1,000 basis points.
- SKU complexity cut by 30 percent.
- Inventory days declined to 195 from 227.
- Cash conversion cycle improved to 123 days from 162 days.
Management is targeting inventory turns of 3 times, compared with the current 2.7 times.
Operating cash flow for FY25 stood at Rs 738 crore.
Hush Puppies, Bata’s fastest-growing brand, contributes 18-20 percent of total revenue.
The company has increased marketing spending by 1.5 times, with 80-85 percent allocated to digital channels.
Management also acknowledged the need to strengthen its appeal among younger consumers and is working on a dedicated sneaker proposition.
Only around 10 percent of recent product design investments have reached stores so far, with the remaining launches scheduled over the next 12 months.
Cost measures
The closure of an older manufacturing facility is expected to result in a 10 percent reduction in employee costs.
Raw material inflation across:
- Polyurethane
- EVA
- Leather
is running at 5-6 percent, which the company is addressing through selective price increases.
About the company
Founded in 1931, Bata India Ltd is one of the country’s largest footwear retailers.
The company operates:
- More than 1,375 modernized stores.
- A wholesale network of over 30,000 dealers.
TL;DR
Bata India is accelerating its distribution overhaul through wider adoption of Zero-Based Merchandising, expansion of its franchise network and growth in digital channels. The company aims to have nearly 1,000 franchise stores within a year while improving inventory efficiency and strengthening its appeal among younger consumers.
AI Summary
- Bata plans to expand its franchise network to nearly 1,000 stores.
- Zero-Based Merchandising has been rolled out to 700 stores.
- bata.com recorded 81 percent year-on-year growth.
- The value segment stabilized after three years of decline.
- Operating cash flow stood at Rs 738 crore in FY25.
