Footwear maker Bata India is in talks with German sportswear maker Adidas for a strategic partnership, persons in the know said.

The discussions are said to be in an advanced stage with the two majors working on the final contours of a deal which will likely be a revenue share arrangement.

When contacted, both Bata India and Adidas declined comment on the issue.

Shares of Bata, which is listed on the domestic stock exchanges, jumped 7.3% intra-day on Thursday, finally settling at Rs 1,733.75 apiece on the BSE, up 5.3% versus the previous day.

Through the collaboration, Adidas is likely to use Bata India’s retail network to boost its presence in the country, industry sources said.

The German sportswear maker is looking to grow turnover in India, where it lags peer Puma, the largest  sports retailer in the country.

By riding Bata’s retail network, Adidas, which has under 1,000 stores in India, which are largely franchise-led, is hoping to make inroads into many more markets in the country, retail experts said.

Bata India, the flagship of Netherlands-based Bata BN, houses brands like Hush Puppies and Scholl and has more than 2,050 stores across the country, according to its latest annual report.

In a recent media interaction, Bata India’s managing director and CEO Gunjan Shah said that the company was re-entering the premium market with fresh portfolios and price points.

It would also increases spending on advertising and promotions to connect with young digital-savvy consumers.

Bata is also pushing for offline sales growth and expects a major chunk of growth to come from its expansion under the franchise model, where it plans to add another 125 stores in FY24 and increase its presence at multi-brand retail outlets.

Bata, best known for affordable price points and a range of footwear across men, women and children, has grappled with changing consumer preferences over the last few years.

Net profit tumbled nearly 10% year-on-year in Q1FY24 to Rs 107.8 crore. Revenue from operations for the June quarter stood at Rs 958.1 crore, a growth of nearly 2% over Q1FY23.

Expenses were higher during the quarter under review to Rs 826.9 crore versus Rs 792.6 crore reported a year ago.

Operating margins declined 100 basis points to 25% in Q1 versus 26% reported last year. One basis point is one-hundredth of a percentage point.