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Samsonite to double growth

Travel luggage company will diversify in GCC by acquiring non-travel brands

Dubai — Samsonite has plans to expand its retail footprint in the GCC by diversifying its non-luggage offerings, a chief executive at the company has revealed.

In an exclusive interview with Khaleej Times, Ramesh Tainwala, CEO of Samsonite, said that the Middle East, and the UAE in particular, is a very strong market for the company.

“The UAE has a very important role to play for us, and we see opportunities for a bigger retail footprint; being an affluent shopping hub, it is a sector with an influence on several surrounding markets as well. People come here from all over the world to shop,” Tainwala added.

Tainwala further said that Samsonite was diversifying and expanding into adjoining segments by identifying and acquiring new brands. “We wanted to diversify our business from being just a travel luggage company. If you are looking to be a serious player in the adjoining space segments, then one of the ways to do so is by acquiring brands; brands which have a strong background and success story in at least one geographical location, which we can then use to expand globally,” he said.

Recently, Samsonite acquired Speck Products, a leading US designer and distributor of slim protective cases for personal electronic devices. Prior to that, the company acquired Lipault, a French luggage brand; and Hartmann, another American luxury brand.

“One of the first brands we acquired was High Sierra. It’s one of the best brands in the backpack segment in North America. We also acquired Gregory, a brand that specialises in professional outdoor backpacks for hikers and mountaineers. We have statistics which showed that 80 per cent of serious mountaineers preferred to use Gregory products,” Tainwala said.

He said: “Our entire acquisition strategy is based on branding, expanding and leveraging the machine of Samsonite, which reaches out over 100 different countries through almost 70,000 point of sales. We are looking for brands that are interesting to us; those which will fit into our portfolio.”

Elaborating on Samsonite’s diversification strategy, Tainwala said he had a clear idea of where they are taking the brand.

“Five years ago, 90 per cent of our business was in the luggage segment. The remaining 10 per cent was in the small bags, close-to-body products segment. Nowadays, the non-travel segment contributes around 25 per cent of our sales. Over the next five years, we would like to get to a point where we can say that the non-travel segment starts to contribute to around 50 per cent of our business,” he explained.

Asked about the company’s future plans, Tainwala said: “We would like to build on our strong DNA, but we also want to communicate to our customers that we are not just a durable luggage brand. We have very successfully added new products and elements of fashion to our brand over the past five to six years, and are now a $2.5 billion business. We have almost doubled our business in the past five years and we intend to double it to $5 billion over the next five years.”

“In 2015, we expect to add another 12 stores across the GCC,” he added. “We are also exploring the idea of launching multi-brand retail stores. Both our Samsonite and American Tourister brands are doing extremely well, and will continue to perform well and contribute to the bulk of our sales. In terms of how we have grown over the past few years, the Middle East market has been a very interesting one for us. CAGR (compound annual growth rate) over the last five years has been in excess of 25 per cent. In the GCC, I believe that we can double our business again in the next three years.”

— rohma@khaleejtimes.com