The decision of luggage giant Samsonite International to acquire rival US luxury bag maker Tumi in a deal estimated at $1.8 billion is set to provide a major fillip to its India operations.
While the all-cash transaction is expected to give Samsonite access to the premium end of the luggage market, the deal is expected to bring in huge cost savings in terms of logistics, sourcing, sales and marketing.
Over 40 per cent of all Samsonite hard luggages are manufactured at its plant in Nashik, Maharashtra.
Some of its brands include Samsonite, American Tourister, High Sierra, Hartmann, Lipault and Speck.
Sources in the know said the deal would incorporate a “distribution and product development pact" between the two companies, whereby Samsonite could utilise its distribution network to expand Tumi’s global footprint.
At present, Samsonite's products are sold at 46,000 points of sale in wholesale and retail channels, and across 100 countries.
Ramesh Tainwala, Samsonite Chief Executive, was not immediately available for comment.
Sources said the deal provided a huge opportunity for Samsonite to leverage Tumi’s best-in-class products, some of which are already available in India.
Some of Tumi’s brands include the Alpha collection, Arrive, Tegra-Lite, Dror, Vapor and Beacon Hill.
Tumi opened its third store in India in 2012, at New Delhi's premier luxury mall DLF Emporio.
Tumi also has stores at retail outlets like the Palladium in Mumbai, and UB City in Bengaluru.
Deal to leverage products Sources, who declined to be named, said the deal could help strengthen Samsonite’s multi-brand retail platform, and increase visibility for Samsonite products among target global consumers, and drive sales by offering better product assortment. They added that the deal has limited overlap in market positioning, price point and distribution.
The Nashik plant started operations in 1996 and is known as Samsonite South Asia. It currently satisfies demand arising from the Asian market, though its products have also been shipped to Germany.
Sources said hard luggage pieces (ABS products) are also manufactured at Samsonite’s other plants in China, Belgium and Mexico.