Dubai: Luggage and handbag brands are not just getting snapped up by shoppers alone ... they are doing some of the buying as well these days. Early this month, Coach — and a label that is quite up there in the premium stakes — put up $574 million (Dh2.1 billion) plus to get its hands on Stuart Weitzman, the luxury footwear brand. It’s not alone. Samsonite, the world’s leading luggage brand, has in the recent past made a habit of acquiring niche brands for tidy sums and thus extending its reach beyond its core product line. And there is more to come, according to Tim Parker, Chairman of Samsonite International, who was in Dubai for a brief stopover last week.
“We don’t have handbags in our portfolio at the moment ... and that’s something we will try and plug, but not necessarily through acquiring a luxury label,” said Parker. “A mid-priced brand would suit our requirements perfectly ... sort of a bolt-on opportunity. If we are to double the size of the business in five years, we need to make those acquisitions happen.”
It was after Samsonite’s $1.25 billion listing on the Hong Kong bourse in 2011 that things started happening on the buying front. There was the $35 million purchase two years ago of Hartmann, a “storied” luggage brand that had a niche following in the US. And last year, it bought Gregory Mountain Products, a backpack label, for $85 million, and Speck Products, which makes protective cases for tech gadgets. There was another by which it brought Lipault, a French brand with a youth oriented following, into its fold.
All of which is quite some distance removed from Samsonite’s role as a luggage brand. “We are not overloading the core business through all these purchases,” said Parker. “Sure, there have been enough instances of companies losing focus and letting their core business get eclipsed. It’s not going to happen with us.
“We are only getting into adjacent product areas with our new buys — what we are then able to do is leverage our production — a factory network of 100 — and distribution strengths — being present in just about every market — to benefit the new additions.
“This is what we are trying with Hartmann, which did not have a reach beyond America. In four to five years, it’s going to develop into a $200 million line for us.”
As to what the immediate future holds for Samsonite itself, Parker said: “Apart from Samsonite we also have American Tourister, and for 2015 the aim is to attain substantial organic growth.” (The company recorded revenues of $1.1 billion in the first-half last year, up 12.4 per cent from the same period in 2013.
If business and holiday travel numbers hold up to last year’s levels, reaching those “organic” growth goals shouldn’t be too much of a bother for the brand. Even otherwise, it will have those prospective new purchases to keep it busy.
