Bata's French subsidiary asked a French court in Nanterre yesterday for protection from its creditors because of mounting losses and poor sales at its stores this year. A spokesman for the company said that the court-appointed receiver will probably look for other companies to take over some of Bata's 136 remaining stores in the country, many of which have excellent locations.
A French newspaper, Les Echos, mentioned among the problems the fact that Bata has launched a single European collection for the autumn/winter that is more fashion-oriented and higher-priced than before. About 60 percent of the collection is made in Europe - mostly in Italy, Spain and Portugal - and more than half of the styles are in leather.
The collection has not received the desired recognition in the French market. Aside from the mild weather, which has affected all shoe retailers, the low-income people who used to shop at Bata in France have found the new styles too expensive, while the low-priced image of the chain has failed to attract customers with a higher disposable income, the newspaper said. Evidently, the difficult economic situation that France is going through is not helping the company.
Bata France, which celebrated its 120th anniversary last year, has gone through many changes of strategy and management since the late 1990s, when it decided to shut down its manufacturing operations in the country. Faced with strong competition from two other major French retail groups, Eram and Vivarte (see separate story in this issue), it closed down about 60 stores in the last six years. The parent company, which steers its European retail operations out of Italy, appointed a new country manager a month ago, François Le Ménahèze, who had run the French subsidiary between 2018 and 2010.
With a staff of about 800 employees, Bata France generated sales of €91 million last year, down from €110 million in 2008, when the financial crisis began to affect its performance. The company lost a total of around €30 million in the last four years, including €9 million in the past year alone.
In a public statement, Bata said it intends to look for all possible means and solutions to minimize the social and financial impact of this decision and put its French business on a sustainable footing in the future.