Samsonite unpacks new luggage theme

Kamiliant brand to enter the below-Rs 5,000 segment

The world's largest luggage-maker, Samsonite, will introduce its third brand in India called Kamiliant in a bid to counter competition in the below-Rs 5,000 segment. The move comes as Samsonite looks to consolidate its presence in India, its fifth-largest market in the world.

Along with American Tourister and flagship Samsonite, the company derives annual sales of around Rs 1,400 crore in India. American Tourister sits in the Rs 5,000-10,000 price range, while the flagship brand is available for Rs 10,000 and above.

"Test-marketing of Kamiliant was on for the last two months in select markets and now we will roll it out nationally," Ramesh Dungarmal Tainwala, Samsonite's India-born chief executive officer (CEO), said.

The launch is expected to help Samsonite make inroads into 70 per cent of the Rs 5,000-crore organised luggage market in India. "We did not have a presence in this segment. With American Tourister and flagship Samsonite, we were addressing only 30 per cent of the market. That will change now," Tainwala, who took over as the company's CEO in 2014, says.

The need to tap the broader domestic market comes as India emerges among Samsonite's fastest-growing markets in the world. "India has the potential to get into the top three markets in the next four to five years," Tainwala, 56, says.

Samsonite's top four markets are the US, China, Korea, and Japan. But a growing middle class, aspirations, and income levels in India mean the urge to travel is growing among Indians, increasing the growth prospects for companies such as Samsonite, analysts tracking the market said. "Affordable, but good-quality luggage is something that will grow in the coming years," Tainwala says.

The company is stepping up investments in improving distribution both online and offline. The firm has 3,000 offline stores, and plans to ramp up this number. E-commerce already gives the company six per cent of its India sales, expected to touch 20-25 per cent in the next four to five years.

Additionally, to ensure the growing base of rich consumers is not ignored, Samsonite will also expand the reach of Tumi Holdings, a US luxury luggage brand acquired on Friday for $1.8 billion. Tainwala says brand stores will be launched in a few more cities besides Mumbai, Delhi, Kolkata, and Bengaluru where it already has them.

The Tumi acquisition is the largest for Samsonite since its listing in 2011 and will add close to $600 million to Samsonite's reported global revenue of $1.82 billion for the first nine months of 2015. The company has not disclosed its full-year 2015 numbers yet.

In the past few years, Samsonite has been on an acquisition spree, buying brands such as high-end luggage makers Hartmann and Lipault, backpack makers High Sierra and Gregory Products, case maker Speck, and airport retailer Rolling Luggage. "These acquisitions were small transactions valued at more than $250 million each," Tainwala said over telephone from Hong Kong.

The Tumi acquisition, says Tainwala, has an Asian dimension, since the brand has a limited presence in the region. Tumi derives 68 per cent of its revenues from North America and the balance from the rest of the world. Samsonite, which has expanded aggressively outside of the US in recent years, is expected to push the brand in emerging markets.

The deal, says Tainwala, is the culmination of almost 15 years of courtship. "We had been wooing them for the last decade-and-a-half. It finally clicked.The transaction will be closed by the end of 2016 and the next two years will be spent integrating this acquisition with Samsonite," Tainwala adds.