CNBC Business | Baggage handler

Baggage handler

Former Louis Vuitton CEO, Marcello Bottoli, is turning Samsonite from an American basket case into a European multibrand powerhouse. Boyd Farrow reports

In a bland meeting room on an industrial park near London’s Heathrow is an array of women’s handbag and leisure bag prototypes. Glittery things, feathery things, fur things, purple concertinaed snakeskin things. Things that invite you to pick them up. Next to them are some futuristic-looking trainers – silver, cute, improbably elegant, the sort of footwear Girls Aloud might wear if they were making a video set in outer space. These, it turns out, are for men.

The company behind these indulgences is not a fashion outfit, although it has signed up cutting-edge designers Alexander McQueen and Victor & Rolf. Nor is it fabulously glamorous, despite owning more than 60 boutiques in some of the world’s fanciest shopping drags to showcase its runway collections. Welcome to Samsonite, the luggage maker that was days away from its second bankruptcy in a decade after the post-9/11 meltdown but now hopes to float as a $2bn global lifestyle conglomerate.

Samsonite’s rebound has already been remarkable. Its 2007 turnover reached $1.07bn (€729m) and it enjoyed gross profits of $550m (€375m), a double-digit rise. But for the company that recently adopted “Life’s a journey” as its slogan, these gains only represent baby steps. “I predict 10% growth a year, for five years,” says its 46-year-old Italian-born CEO Marcello Bottoli, who was until 2004 CEO of an even more iconic brand, Louis Vuitton. “The plan at Samsonite was to transform a troubled mid-sized luggage company into a global, multibrand, lifestyle group. Roughly, 40% of our sales are in Europe, 35% in the US and 20% in Asia. Cashflow is in excess of $100m, profit is in the high teens and expansion is on target.”

Clearly Bottoli is enjoying the freedom to talk about his currently unlisted company’s balance sheet. Domiciled in Boston and London – where Samsonite’s owner, private equity firm CVC Capital Partners, is based – he is tieless and tanned in December. Ladybird cufflinks temper the seriousness of his dark suit and monogrammed shirt. There is another monogram inside his holdall, an alligator skin Lambertson Truex, the US luxury accessories house in which Samsonite acquired a controlling stake in 2007. He inhales the expensive leather appreciatively.

CASE STUDY Store design reinforces the
brand’s luxury appeal “Samsonite is a wonderful asset – it has real depth,” Bottoli says. “It has become a household name for its strength and reliability. And it is not just its luggage. In Italy a Samsonite briefcase is a common graduation present – my mother gave me mine – and it’s a generic label, like Hoover. The other advantage the company has is its infrastructure. However, when I joined, many executives were based in Belgium just because that’s where one of our factories was, while the headquarters were in Denver. This lack of centralisation meant it missed out on opportunities to extend the brand and diversify.”

As well as building on a hugely successful expansion into footwear and a move into the women’s handbag market – “which once would have been considered outrageous,” laughs Bottoli – the current transformation will involve a big push into eyewear, men’s and women’s fashion accessories, timepieces, mobile phones, stationery and various hush-hush projects.

Bottoli began his career at Procter & Gamble, whose pioneering positioning of brands to complement each another while blocking competitors was enthusiastically adopted by luxury houses in the mid-1980s. Continuing the cycle, Bottoli imitated Louis Vuitton by installing Samsonite’s first creative director, Quentin Mackay, who had freshened up stately British bags-and-boots firm Tanner Krolle and Spanish handbag outfit Loewe. Bottoli claims that Samsonite is now in a terrific position because, as the world opens up, the role of accessories is changing in mature markets. “There is a decline in logo mania. Better-educated consumers attribute more value to a quality product than a fashionable label,” he says, adding: “This is the market’s natural evolution.” He picks up of one of the prototype bags in front of him to admire its expandability, before deciding that the outside label is too clunky.

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