Recently, I read about Tumi and Samsonite joining forces in the luggage business. Check out this from The Washington Post...
Two of the biggest names at the baggage claim are about to join
the world’s largest luggage company, said Friday thatit agreed to pay $1.8 billion to acquire Tumi,
a deal that would bring together an every man’s travel brand with an
ultra-luxe one whose suitcases start at around $500. Samsonite hopes the
purchase will allow it to become a more dominant force in the
upscale corner of the market.
“We always wanted to have a play in this segment,
but we have never been able to do it in a very credible way,” said
Ramesh Tainwala, Samsonite’s chief executive, on a conference call with
Schick, a retail analyst at Stifel, said the move was a logical one for Tumi,
which pulled in $548 million in sales last year.
“What we see in the evolution of luxury is that
brands understand that they can only get so big,” Schick said.
In other words, at a certain point, it’s helpful for them to
become part of a larger suite of brands if they want to increase scale and
find operational and logistical efficiency.
was up 2 percent in Friday’s trading session, though its stock was up
about 35 percent for the week since rumors of the tie-up had been circulating
in preceding days.
founded in 1975 and headquartered in South Plainfield, N.J., is known for
inspiring serious customer loyalty.
perfect suitcase,” said Justin McNulty, 34, who lives in Austin and runs the
travel blog Justin Does. “It fits in every overhead compartment, it’s durable
and it looks cool.”
the handle fell off his previous suitcase, McNulty took it to a Tumi
store. “A week later, I got a phone call saying ‘we’re going to send you a
brand-new suitcase. Tell us which one you want.’” McNulty said the deal with
Samsonite made him worried that such customer service might be affected.
“Just like with any other consolidation of companies, you worry. Are we going
to get higher prices and less quality, just like with the airline mergers?”
Samsonite seems committed to maintaining Tumi’s premium positioning in the marketplace,
saying that the acquisition made sense in large part because Tumi brought
something different to Samsonite’s portfolio: In addition to its flagship
brand, Samsonite also includes Hartmann, American Tourister, High
Sierra and other travel bags that aren’t at Tumi’s upscale price point and
aren’t as focused on the needs of business travelers.
said it intends to expand Tumi’s reach in international markets. Currently the
brand gets 68 percent of its sales in North America, with just 17 percent
coming from Asia and 14 percent from its Europe, Middle East and Africa
division. Tainwala also said it thinks Tumi could do a stronger business in
hardside luggage, which today makes up a relatively small share of the