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Samsonite says it grew 40% in first half of 2023; eyes Rs 3,600 crore sales by December

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The company said it gets 20-25% business from premium segment where it faces little competition

Nashik: Premium luggage manufacturer Samsonite has grown close to 40% in the first half of 2023 and it aims to touch Rs 3,600 crore sales by December, a top company official has said.

Samsonite, having 35% share in the Rs 15,000-crore domestic organised luggage market, leads the premium segment with its various products labelled with the original name as well as under the brand of American Tourister.

While its recent addition of Kamiliant brand competes with Safari and VIP in the value segment, American Tourister is positioned between Samsonite and Kamliant as a mass-premium brand.

The company said it gets 20-25% business from premium segment where it faces little competition.

Founded by Jesse Shwayder in 1910 in Colorado, Denver, the American parent Samsonite International is traded on the Hong Kong exchange which earlier in the day reported a $1.04 billion in gross profit for the first six months of 2023, up 47.5% on-year.

Its revenue climbed 44.5% to $1.8 billion on the back of a 310 basis points rise in gross margins by 58.8%.

The profitability was again led by Asia which is its most profitable region with a revenue of $694 million.

Of the entire Indian luggage industry valued at around Rs 35,000 crore, a huge 60% is led by unorganized players while the branded players including Samsonite, VIP and Safari contribute the rest 40%, or Rs 15,000 crore of annual sales, according to a Crisil report.

India and China have been swapping the ranking in volume terms since last year after the US which has been for long the largest market.

This year so far India leads with a 38.4% growth in the first half, while China grew 99.6% after a very bad 2022.

“We hope to maintain the same growth momentum in India in H2 too as travel sees no abetting as people are still in a revenge travel mode after the pandemic. Corporate travel is also growing robustly,” Jai Krishnan, the chief executive of Samsonite India & South Asia, told PTI in Nashik during a plant visit.

Citing company policy, he refused to share India-specific numbers, but according to the company’s 2022 annual report, the country had contributed 7-8% of the group’s total revenue last year.

This means India revenue was around $320 million or around Rs 2,600 crore.

And if the near 40% sales growth it has clocked so far this year, which Krishnan hopes to continue in the second half, it will be adding around Rs 1,000 crore more to the topline, taking the total sales to over Rs 3,600 crore this year.

The Nashik plant, with 8 lakh units of monthly capacity, is the group’s largest manufacturing unit and is also under a Rs 100-crore expansion which should be completed by early next year. Its present output is 5 lakh units a month, Y M Singh, vice-president for operations & logistics, told PTI.

The main Nashik plant, set up 13 years ago, manufactures products under Samsonite, American Tourister and Kamliant brands while backpacks and other products are manufactured in the same city under a contract manufacturing, Singh said.

According to Krishnan, the domestic travel industry is experiencing significant growth and Samsonite, being the world’s No. 1 brand for decades, is leading this growth wave.

According to 2022 annual report, India accounts for 7-8% of the group revenue of $4 billion in 2022 and Krishnan sees this crossing 10% this year given the robust growth underway.

In recent years, the industry has grown substantially. From 2019 to 2023, the market size has almost doubled, with a remarkable 47% increase in value in 2022 over 2019, he said, adding this surge is attributed to the post-Covid binge travel. Experiential travel is gaining popularity here and this has further boosted travel industry’s growth.

To capitalise on the growing demand, the company plans to expand its retail presence, increasing the number of AT (American Tourister) stores to 500 by Diwali, up from 460 now.

It also runs 40 company-owned and company-operated outlets at premium locations for Samsonite, Krishnan said.

Samsonite’s product range includes hard and soft luggage, with the latter designed in-house and stitched by third-party manufacturers.

The Nashik plant also boasts of being the world’s first and the only plant that uses a patented pressure moulding technology to make hard luggage bodies/casings.

According to the Crisil report, the luggage makers are seen clocking 15% revenue growth this fiscal on the back of the fast-changing consumer preferences for hard and premium products and the continuing growth in tourism and corporate travel.

In 2022, the organized luggage makers saw a robust 40% growth last fiscal.

Consumer preference for hard luggage has driven up operating efficiencies and improved capacity utilisation of the organised sector which will help expand their operating margin by 150-200 basis points on-year to 16% this fiscal, the report said last week.

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