Factory Closed, Bata Shoe Store Operates Relying on Imported Products
After the closure of its shoe factory in Purwakarta, the Bata shoe shop continued to operate relying on imported products.
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JAKARTA, KOMPAS — After announcing the closure of its factory in Purwakarta on Tuesday last week, shoe manufacturer PT Sepatu Bata Tbk did not close shops selling shoes. The shop will continue to receive shoe supplies from imports from their other factories abroad.
Monitoring Kompas, Monday (6/5/2024),brick shoe shop at Bintaro Xchange Mall, South Tangerang, remains operating as usual. The guards are still on duty as usual.
Dwi, one of the storekeepers, stated that as per the information provided by their leader, Bata shoe store will continue to operate and sell as usual. "It is only the factory that will be closed. The store will remain open," said Dwi on Monday.
Sales employees in stores are different from factory employees. The shop continues to operate normally.
According to the information conveyed by the leader, continued Dwi, the shoes that will be sold later will be imported from another country. However, he admitted not knowing their origin.
Edi (45), one of the customers, said he had just found out that Bata shoe factory was closed. However, he was also grateful that the shop was still open and still selling shoes.
Edi tells us that he has been a customer of Bata shoes since he was still in elementary school. Now, he also buys Bata shoes for his youngest daughter who is currently in fifth grade.
"The price is affordable for children's school shoes. The shoes also have a choice of all black colors. This is suitable for complying with the school rules that require all students' shoes to be black," he said.
Bata sells a variety of shoes, ranging from children to adults. The prices vary depending on the model. Children's school shoes are sold starting from Rp 199,000 per pair.
The price is affordable for children's school shoes.
One of Bata's other shoe stores, located in Pamulang, South Tangerang, is still selling as usual. Like Dwi, one of the store attendants named Putri said she knew that Bata's factory in Purwakarta has closed. However, sales at her store continue to operate as usual.
"He said the shoes would be imported later. "So, we just keep selling, as usual," he said.
Quoting its annual report, Bata currently has 458 stores spread throughout Indonesia.
When contacted by Kompas, the Director and Corporate Secretary of PT Shoe Bata Tbk, Hatta Tutuko, did not respond to telephone calls or reply to messages sent.
Previously, Bata announced the closure of its factory in Purwakarta on Friday (3/5/2024) through information disclosure displayed on the Indonesia Stock Exchange (IDX) website. In the information, Hatta Tutuko, the Director and Secretary of PT Sepatu Bata Tbk, stated that the factory was closed on Tuesday (30/4/2024).
In the official statement, Hatta stated that PT Sepatu Bata Tbk has made various efforts over the past four years amidst losses and industry challenges caused by the pandemic and rapidly changing consumer behavior.
The company can no longer continue production at the Purwakarta factory due to a continual decline in customer demand for the products made at the factory, and the factory's production capacity far exceeds the sustainability of supplies obtained from local suppliers in Indonesia.
The incident, information, or material fact has an impact on the operational activities, legal, financial condition, or the continuity of the business of the issuer or public company. With this decision, the company is unable to continue production at the Purwakarta factory.
This factory in Purwakarta has been operating since 1994. Previously, the Bata shoe factory was located in Kalibata, Jakarta. In 2009, the company sold the factory in Kalibata and moved to Purwakarta.
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Keep losing
Citing its financial report, the company has experienced losses for at least the past three years and they have been increasing. In 2021, Bata's comprehensive losses reached IDR 51.04 billion and doubled in 2022 to IDR 107.15 billion. In 2023, the losses rose again to IDR 188.41 billion.
From the perspective of net sales revenue, the company recorded Rp 609.6 billion in 2023, a decrease of 5 percent from 2022 which was Rp 643.45 billion. In 2021, their net sales were worth Rp 438.48 billion.
In 2023, 99.2 percent of their sales will be for the domestic market. Meanwhile, exports will only reach 0.8 percent of their sales. This percentage is not much different from 2022, where 99.1 percent is for domestic market sales and 0.9 percent is for exports.
Impairment expenses in 2023 will reach IDR 37.27 billion, an increase many times compared to 2022 which was IDR 1.8 billion.
Their shoe production has also decreased. In 2023, Bata produced 1.15 million pairs of shoes, a decline compared to 1.8 million pairs in 2022. However, shoe production in 2022 was higher than in 2021, which amounted to 1.57 million pairs of shoes.
The increasing burden of business, among others, in terms of salaries and wages in 2023, amounts to IDR 26.97 billion, increased compared to 2022 which was IDR 20.96 billion. In addition, the burden of depreciation in value in 2023 amounted to IDR 37.27 billion, increased multiple times compared to 2022 which was IDR 1.8 billion.
The financial condition of the company is also squeezed. This is reflected in the size of the company's equity, which in 2023 decreased to Rp 131.50 billion compared to Rp 319.76 billion in 2022. At the same time, the company's liabilities in 2023 actually increased to Rp 454.39 billion, compared to Rp 404.30 billion in 2022.
The size of the company's assets in 2023 will decrease to IDR 404.30 billion from 2022 which was IDR 724.07 billion.
In the annual report for 2023, the director's report stated that the year was full of dynamics and changes, as well as the impact of internal and external factors that affected the company's operations. In addition, operational challenges cannot be separated from the increase in production costs and fluctuating raw material prices.
For future strategic plans, Bata focuses on managing existing stores, improving product quality, and implementing aright pricing strategy for each product. Apart from that, Bata continues to strive to maximize sales through e-commerce and omni-channel, including maximizing marketing campaigns during religious holidays and back to school celebrations. i>
In 2023, the shareholder composition of Bata will be owned by Bafin (Nederland) BV with a share ownership of 82.01 percent. The remaining 17.99 percent is owned by the public.
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