Samsonite India will be shutting down its manufacturing unit at Nashik over the next three years. Production at the plant, which has a capacity of 10 million units, will be scaled down to 50 per cent by December 2006.
Ramesh Tainwala, president, Samsonite, South Asia said that this was being done in line with the company's global vision of becoming a design and retail oriented company. Samsonite will gradually sell off its manufacturing equipment in Nashik and the factory will then be converted into a logistics warehouse for Samsonite.
The plant is Samsonite Corporation's second-largest manufacturing facility globally. The company will henceforth be outsourcing products from local vendors as part of its global strategy.
Tainwala said that under the new chief executive officer Marcello Bottoli, Samsonite had redefined its core competencies and will increasingly focus on product categories other than luggage.
"Over the next three years, luggage should form only a third of our total sales," said Tainwala. "The company has decided that instead of manufacturing, it will focus its energies and investments on retail from now on," he added.
By February 2007, Samsonite will launch a range of shoes, which Tainwala said will be "comfortable business-travel shoes".
The Samsonite stores are in the process of getting restructured and soon about 50 per cent floor space will be dedicated to footwear and other accessories that the company will be launching.
Tainwala said the new products that will be launched under the Samsonite brand, will in some or the other way linked to travel. The company has also tied up with international designers for certain product lines and will soon be announcing a similar association with an Indian designer as well.
It will be investing close to Rs 50 crore (Rs 500 million) into retail expansion in India over the next year. "Currently, about 85 per cent of our sales come from our exclusive outlets," said Tainwala. While the number of Samsonite exclusive outlets are slated to go up from 174 to 200 by December 2007, the high-end Black Label stores will go up from six to 14.
The Black Label stores will be a mix of company-owned and franchise outlets. It will also be looking at tapping a larger consumer base by entering 16 new cities in addition to the 14, where it is already present, mainly state capitals and B-class cities. The Rs 350-crore (Rs 3.50 billion) branded luggage market has been growing at about 15 per cent for the last two years.
