Zoltán Kárpáti, Owner

"When I was 14 or 15, my parents sold shoes; for me, it wasn’t a question whether I’d go with them during school holidays”, says Zoltán Kárpáti, owner of Batz Kft. He no- ticed that the comfort category always sells well, is in demand all year round and is not affected by fashion. When he turned 18, he decided to become more actively involved in the family business. In the meantime, he was also fascinated by the world of numbers, graduated as an economist and wrote his thesis on branding. He decided to combine the two and put the knowledge he gained at university to good use in the world of shoes and footwear. Initially, he thought he was building a brand for finished products, but he soon found that nobody was making a product of the quality he would put his name to.

The main focus is on attracting and retaining brand-loyal customers—he has always been averse to price competition. The lay customer cannot really tell the difference between cheap Chinese products and true quality, so they stuck to production in Gyomaendrőd, Hungary. After a rapid expansion in Hungary, they also entered the Czech Republic and Slovakia, with a total of 200 dealers under franchise arrangements. (They have 400 franchise partners in Hungary.) Retailers pay for what they run out of, so they don’t have to finance large inventories. ”This system is a key factor for success, the speed of product circu- lation is quite fast”, says Zoltán Kárpáti. To do this, of course, he had to convince raw material suppliers, so he only had to finance labour costs. From the start, he thought in networks. An important part of the model is the private branded stand, which comes with the franchise assortment. What makes Batz unique in the shoe market is that it provides a continuous supply of out-of-stock sizes, so retailers don’t have to buy and order complete sets.

They also export to other countries, but not on a franchise basis. The latest plan is to expand into Russia, which would be a major breakout point. That is a huge market, but the risk is also very high. However, this type of product is very widespread in Russia. The net turnover of around HUF 2 billion would increase by leaps and bounds if the Russian market could be penetrated. In Germany and Austria, on the other hand, brand loyalty is very strong—it’s very difficult to enter this market. The situation is similar in the Czech Republic, but for them the franchise scheme is very attractive. Of course, this has its risks. These are minimised by detailed mapping of prospective retailers and monthly settlement. The mapping includes, for example, how long a retailer has been in the industry and where their shop is located—a detailed scoring system has been developed to rate retailers.

The comfort slipper market is very conservative; “clogs were clogs 20 years ago”. However, the aim is also to attract new customers, young people, so they try to exploit the variation in colours and decoration. A collaboration with Réka Vágó has been established, so the youthful collection will be launched next year. They are also thinking about opening their own brand stores, where they can show the production process and build a more direct relationship with customers to offer a lifestyle experience.

At the start, during the collapse of the Hungarian shoe industry, Zoltán Kárpáti visited several factories and, after numerous rejections, received information that there was a factory in Gyomaendrőd that was no longer in operation but had once produced high-quality goods. At the time it was an old factory building, with cobwebs, dirt, a cold office and a slightly tormented owner inside. “I put a slipper on the desk, his eyes lit up and he said ‘we’ll do it’”. A handful of people started making Batz slippers and a success story was born. The few people then became 120 and three shifts, barely keeping up with orders.

Then the pandemic hit and the restrictions radically reduced demand. People simply didn’t shop, and the shops’ average daily order quantities of hundreds or thousands dropped literally to zero. “I sat down and had a chat with people, and  we agreed that they would go on paid leave. We had to make some uncomfortable decisions, we had to let go of some colleagues; many of them, who were good colleagues but not excellent, left on their own. The excellent ones are those who not only do the job they are given but are creative and look for new opportunities. ‘The worst enemy of an excellent workforce is a good workforce’, a friend of mine used to say”. The company has benefited from this renewal, with orders starting to increase after a few weeks and then steadily rising, “helped by the fact that we have fine-tuned our advertising, with a strong emphasis on the quality of the ads”.

The year 2020 saw an 8% drop in turnover but, despite this, profits rose to record levels. Sales revenue in 2021 will be higher than in 2019 and further profit growth is expected. One of the big breakthroughs of the future could be a collaboration with the world-famous sole manufacturer Vibram. This will be the world’s first Vibram comfort sole—it took 10 years of per- suasion. There are no plans to acquire smaller companies, but the purchase of the Gyomaendrőd factory is in the pipeline. There has also been foreign interest in acquiring Batz, but the owner has no intention of selling the business.