Schools opening delay derails Bata company

 Schools opening delay derails Bata company

Schools opening delay derails Bata company.

Spread the love

LUSAKA exchange listed shoe making company, Bata says the calendar shift that led to postponement of   schools opening when the third wave of Covid 19 was at its peak in January this year threatened its business.

Presenting the financial results for the half year ended 30th June 2021 Bata Company secretary Esiyasi Sichone said business has been reasonably good given the prevailing situation in the country but the first hurdle was in January when the opening of schools was postponed.

“Normally the January Back to School (BTS) is the biggest in the year. This obviously had a negative effect on our business. When schools finally opened, the sales were not as expected, although we managed to recover some of the lost business,” Sichone said in a statement accompanying the results.

Sichone said the company witnessed an improvement in sales all round from March and the trend continued until the covid19 third wave kicked in changing all the attained gains.

“With the new restrictions announced by government in response to the new wave of covid-19, it became very difficult to do business with shopping malls being the hardest hit as traffic in the malls has drastically reduced. Business in the malls practically came to a halt which resulted in a number of empty stores in the shopping malls which is not good for business,” Sichone said.

However a combination of good agricultural season and good prices led to good business in the rural areas.

“Our rural stores however were doing quite well and achieving their targets. This in turn was due to good harvests that farmers had this year coupled with the good prices offered especially for maize and soya beans. We still believe that our stores in the rural areas will continue with good sales as the political situation improves,” Sichone said.

“The non-retail sales department achieved good results so far and with the good supply of stocks business could even have done better. The shortage of both gumboots and industrial shoes in the beginning of the year affected its performance.”

The company said the impact of covid-19 has been greatly felt in the procurement of required merchandise to sustain the stocks as the pandemic disrupted main source of supply making it difficult to maintain a steady supply for footwear.

“The other challenge in our sourcing was the issue of the local currency exchange rate which had continued to depreciate in value resulting in our shoes being much more expensive than they should actually be. The local currency kwacha continued to depreciate (7%) from ZMW 21.1958 /USD in January 2021 closing at ZMW 22.6632/USD for the period under review,” said Sichone.

For the outlook for the second half of 2022 remains positive for the company as the firm continue implementing measures that have enabled it to effectively operate in the COVID-19 environment.

“We are confident that the appreciation of the local currency will be sustained thereby bringing stability in our product pricing for the benefits of our clients,” Sichone said.

Fidelity Hamilton Mhlanga

Fidelity Hamilton Mhlanga has been writing finance and business news over the past 5 years. He earned a BSC in Media and Society Studies and Masters of Development Studies from Midlands State University, in Zimbabwe. He follows mining, insurance, banking and energy stories. He is passionate about development and growth.

Related post