High growth in luggage segment to continue for next five quarters: Samsonite India CEO

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Sales of luggage makers have surged as travel bounces back after more than two years of the pandemic.

US luggage manufacturer Samsonite’s Indian unit said sales jumped 40 percent in January-June this year from levels in the same period in 2019, which was the company's best year so far, CEO Jai Krishnan told Moneycontrol. The company has grown 109 percent as compared to the same period in 2021, he added.

Krishnan said while high growth in the travel and luggage segments is backed by pent-up demand, the surge will continue for at least the next five quarters.

“Millennials today are traveling more than previous generations and we have also witnessed a shift of consumers towards branded products and both these factors are contributing to our growth,” Krishnan said.

Sales at luggage makers fell drastically as consumers stayed indoors due to movement and travel restrictions imposed during the pandemic. VIP Industries, Safari Industries, and Samsonite India reported an 80-90 percent fall in sales in the April-June quarter of 2020, with the onset of the pandemic.

Samsonite India had closed about 20 percent of its stores as it struggled with low footfalls and sales. With the situation turning around now, it has launched more stores than it had shut, introduced a new warehousing facility, and expanded its manufacturing capacity.

“We are opening about 10-12 stores every month for our brands Samsonite and American Tourister,” said Krishnan.

Samsonite India has four brands – Samsonite in the premium segment, American Tourister in the value segment, Kamiliant at the entry level, and High Sierra backpacks. It operates about 80 exclusive brand outlets (franchise operated) for American Tourister and Samsonite and 75 distributors which supply about 3,500 stores in the country.

The company has a strong presence in modern trade networks and e-commerce. Currently, e-commerce contributes about 18 percent to its overall sales.

The luggage manufacturer is eying small-town India for American Tourister and is rapidly expanding its presence in tier II towns and beyond, while for Samsonite, the focus remains on large cities. It recently launched a sustainable collection, Magnum Eco, under the Samsonite brand, which is made out of recycled material.

The company invested Rs 150 crore over the past two years on expanding its plant in Nashik and plans to install 10 more machines at an investment of Rs 100 crore.

“We currently produce 4.8 lakh-5 lakh units per month and after the installation of new units we will produce 6 lakh units monthly,” said Krishnan.

Samsonite India is expanding capacity not only to cater to increasing demand but also with an eye on experts. According to Krishnan, India could emerge as an export hub for the company.

The company is giving a major push to advertising for Samsonite and American Tourister this year.

“We have not done any big campaign since March 2020. Also earlier, most of our budget went for American Tourister but this year we will be focussing on Samsonite as it is also witnessing high growth,” said Krishnan.
Samsonite India has earmarked 6 percent of its revenue for advertising this year.

“Manufacturing and advertising are going to be our big investments this year,” he added.