Samsonite diversifies into shoes; eyes watches
LUGGAGE BRAND Samsonite has been gradually taking steps towards related diversification to offset the adverse effect of 9/11 and the SARS epidemic, which hit travel and sales of travel gear and luggage.
After a three-year satisfactory performance of its shoes business in Italy, the company is now looking at strategically important markets like India and Korea for similar foray.
Ramesh Tainwala, president, Samsonite South Asia, said: “We are diversifying from a luggage to a lifestyle brand and may look at an entry into travel-related categories like eyewear, perfumeries and watches in future.” The company is hoping the strategy would help it reduce its reliance on the luggage business, he added.
The diversification strategy is to ensure that in a period of three to five years, turnover from the core business should be reduced to 50 per cent of the total turnover.
The shoes range will be available under the “Samsonite Classic” and the Samsonite Black Label” brands. “Samsonite Classic will be available between Rs 4,000 and Rs 6,500, while Samsonite Black Label will have a price range of Rs 10000 to Rs 20000,” said Nikhil Gupte, Business Manager, Footwear Division, Samsonite South Asia.
The first year of shoe business in India (January 2008 to December 2008) is likely to bring revenue of Rs 15 crore to Rs 20 crore, Gupte said. The shoes range will be sold primarily through the company’s 167 Samsonite Travel World stores.
Tainwala said that the shoes business globally could contribute to 10 per cent of turnover in every market it is introduced. “The shoes business in India should clock a turnover of Rs 50 crore in three years.”
“Asia is the fastest growing market for us, clocking a turnover of Rs 2,000 crore, with India and China contributing significantly, with turnovers of Rs 350 crore and Rs 500 crore (maximum retail price value) respectively,” added Tainwala.