Populated with voracious travellers, Asia has been Samsonite’s most profitable region – accounting for almost 40% of total revenue the first half of 2023. In fact, a new report by global hospitality leader Hilton coined “GenerAsian” a term to describe an emerging generation of Asian travellers who are pursuing travel that will enable them to better understand their identity.
These insights were gleaned from more than 10,000 travellers from nine countries – China, UAE, India, Singapore, Mexico, US, UK, Germany and Japan. The report also found that 73 per cent of Singapore travellers are inclined to spend more on travel in 2024 than they did in 2023, with 74 per cent aiming to reduce spending on other areas of their lives in order to prioritise travelling.
Indeed, the pandemic has led to new insights on how consumers react to freedoms so suddenly lost during the lockdown. Even the common question at Airport passport control “business or pleasure?” has been rendered moot when the current breed of global citizens like to do both as Samsonite CEO Kyle Gendreau discovered in the numbers. How does this bode for the future of travel?
Travelling is often about the experience and the feelings that evokes rather than then numbers. Does your background in finance help or hinder you in grasping the things that are not easily quantifiable by metrics?
I’ve been in Samsonite for 17 years. CFO for 10 of those and in my sixth year as CEO. But the entire time I was here I was really involved in the operations of business, I think all good finance folks who are really doing their job should be involved, and we run a really interesting decentralised business where we have a small core, but we really execute this business regionally, with strong teams and really strong country teams.
The only way to know this business is to be plugged in and so for 17 years, I’ve been very actively involved in the front end of the business, as CFO if you’re doing your job right, you have really good people around you. Your job is to integrate numbers to the front end in order to understand what’s happening in the front end so you understand what you’re doing.
For a long time, I’ve been passionately involved in in every facet of the business, that when I slid from one role into the next it wasn’t like there was a tremendous difference. You might have your views and perspectives but I don’t pretend to design luggage or do anything where I’m not fully aware of what makes luggage work.
Our business has been around delivering fashion forward and trendy products to the consumers that fit what they’re looking for, which is really been the big transformation in the industry from when I started to where we are today. I can bridge the gap between delivering numbers, both as a CEO and CFO, you’re responsible for delivering numbers, but ensuring we deliver what the consumers want which will actually translate the numbers so our investments in innovation, and marketing. I think bridging the two of those things together numbers and business actually make for a better business.
Can you recall situation where you’ve had numbers that told you one thing but your gut instinct told you to go in a different direction?
Often numbers tell you where you should be focused and where maybe you shouldn’t be focused. One of the things that I’ve been very focused on as a as a global business is making sure we’re we’re prioritising what we do for things that move the needle. We have three core brands: Tummy, Samsonite and American Tourister. We’ve had plenty of other brands, but in the midst of pandemic we exited some or we’ve significantly reduced the focus on them. And so this is a clear view on what business and products deliver the profit profile that we should have in the business. You have to operate the business as a balance between profit and also what the consumer is looking for, so it’s an active discussion. This is not a self plug but I think good CEOs should have a finance background so you can understand how the numbers work in relation to the decisions you’re making to drive your business.
What about in situations where “if you always listen to what the customer wants, they might have invented a better horse rather than a car”, do you believe in that adage?
No, we’re luggage and bags experts and so we have to listen but we also understand the technology better and we’re leaders in the space by a mile. Therefore, we can bring real innovation in materials and in design and fashion, that’s where we really listen to the customers because that’s where the trends are. If I bring real innovation and connect it to that, then you get a 113 year old brand that is Samsonite that has literally transformed an industry.
Remember we had luggage without wheels and we had to convince people to have them on wheels? Now imagine trying to tell people you can’t have wheels on luggage – they wouldn’t believe you. You have to push the boundaries, we’re listening to fashion trends, but we’re laser focused on innovation and materials.
I recall we went from no wheel luggage to our first Samsonite in 1986 with two, was Samsonite the pioneer?
I would say Samsonite was the first really commercialise and so we often get credited for it. The industry was already moving that way but it’s very fragmented and the real skill is in commercialising and perfecting the tech so people will adopt it. Our scale enables us to commercialise innovation where we’re often the leader, and put it out to the globe, we can get to the entire population who wants to travel with an amazingly durable product. Our task is to innovate constantly so we keep moving the needle, the industry catches up and we keep moving forward. We’re transforming the industry, not just the company.
luggage is becoming more beautiful and with more focus on the aesthetics, is that part of that innovation since baggage handlers are a little masochistic when It comes to prettier bags?
We can make them super fashionable, feature and virtually indestructible but this doesn’t mean they’re not going to get scuffed. That cosmetic damage often triggers change but we can keep a bag going as long as you want it. We can repair it as long as you want us to, we don’t want a customer to experience baggage failure. So we have so much testing when everything we do on quality durability materials, so that the bag is going to do exactly what we need it to do. We have tumble and dropped testers so we’re constantly beating up our bags before we ever sell it to consumers. It’s going to last but we can make it pretty damn cool too.
17 years ago, luggage was black or blue or grey, maybe gold if you were adventurous but now it’s totally transformed. There was function but none of the performance we have today because material science and innovation is transforming all of that. Our luggage is almost 100% recycled water bottles and every next generation consumer is looking for that. We are thinking about sustainability and environment and this transformation will be part of Samsonite’s history.
I’m glad you raised that point because in addition to being sustainable, your products are now night indestructible. What does that mean in terms of a business model when people aren’t changing luggage as often?
They still do. To be honest, being long lasting and hard wearing has always been the most sustainable attribute of a bag. If you can get longevity out of our products, that’s really a flex for us and we’ve been doing that for 100 years. I’ve been using mu scuffed bag for 10 years and I love it but that doesn’t mean that that impacts my business because there’ll be a moment where I will change for a newer model. I don’t need everyone to change their bags every one or two years but typically four or five years, you’ll get a new model because colour palettes and the technology have changed.
We’re now focused on on recyclability where the material that we’re using here as an end of life to it that can be recycled and repurposed into something else, eventually another bag. Imagine a turning program where you turn it in and we’re turning that back into luggage, that’s not very far away in the future. We can close the loop.
We just started in Malaysia, Singapore and we are trialing it in Indonesia. We’re just really getting to how to use these materials the right way. To date, those changing programs have been turning them into coasters and planters, but there will be a moment that we can start to think about how we can make it back into luggage.
We are studying how a bag comes apart, so it can be recycled. We are understanding how we can build bags for repairability, imagine a world where say a wheel breaks and it happens that I can just send you the wheel and you just replace it because we built a technology where it just slides in without need for screwdrivers.
The other thing that we’ve changed as a business is we make a lot of non travel products. When I started it was probably less than 10% in Asia, today it’s over 30% of what we sell and the non travel business is updated more frequently. We also have huge opportunities to expand our women’s categories across all three of our core brands.
I was with Tumi’s Adam Hershman over in Korea, and he mentioned that you could get your wheels fixed on the same day in-store. Is that something that happens at Samsonite? And is there a temptation to to borrow innovations and ideas from your other brands?
I would say more from Samsonite to other brands. We’re super happy to have Tumi in our portfolio and growing tremendously but real material innovation was with Samsonite, a lot of kind of the sharing that happens between brands is around underlying innovation that we allow everybody to get access to.
The inverse is that Tumi has done a very good job on non-travel like the Alpha and Alpha Bravo backpack. The non travel component of to me is more than 50% of their business which actually matches the industry average more. We’ve taken a lot of know how and experience around design and features from Tumi. We’ve been making business products for 70 years and our classic attache was the first in many parts of the world. There’s plenty of cross-sharing though we run the businesses separately. Positioning is also very different price-wise.
In your opinion, has the pandemic changed how people travel and will this then push innovation in the direction that luggage is designed and used today?
I believe people have new appreciation for what travel means in both business and leisure. And so there’s some lasting kind of benefits to travel in that people really aspire to travel. The most common question in a conversation today is: “where’s your next trip?”
Younger consumers are also moving more flexibly and they tend to use more unstructured luggage like backpacks and duffels, likely because they got used to moving around in trains and cars when air travel was locked down during the pandemic. There are now wheels on duffels because younger consumers are thinking differently about travel. Post pandemic habits are pushing the industry in stimulating new directions.
My parting question: luggage that can transform into a scooter is that “cringe” or do you think that’s the next big thing?
With anything you see on a consumer goods base, you have to think about safety concerns, and we’ve actually had bags that have been self propelled but all of that has issues around safety, durability and quality. I think the scooters are quite fun, but I don’t think it’s something that actually functions in a way that will change your life as a traveller. We’ll bring some of those in but it’ll ever change our business fortunes.