The Hindu Business Line : Witco expects to shed old baggage with new plans

Chennai, Aug. 10 Premium luggage, apparel and accessories retail chain Witco has a slew of plans in its bag with which it hopes to shed some old baggage and transform the 60-year-old multi-brand retailer.

According to Mr V.P. Harris, Managing Director, Witco (India) Pvt Ltd, which used to make its own brand luggage years ago, intends to resuscitate its brand and launch Witco-branded soft luggage by the end of year – sourced primarily from China and made to its own specifics.

He says that the slowdown has forced all retailers to revisit their plans and how they conduct business.

Mr Harris says apart from his own brand luggage and ladies hand bags, Witco will look to transform itself from being more of a luggage retailer to other accessories, which he calls personal products — back packs, school bags, ladies hand bags et al.

It recently tied up with Italian fashion brand Luxottica to retail five of its sunglasses brands.

Retailers too, he says, have to look at working with complementary brands in the same retail space, given the costs. One Witco store in the city, for instance, has a shop-in-shop of Indian Terrain apparel.

Mr Harris says with his own brand of accessories in place, he will look to expand to newer cities through shop-in-shops in lifestyle retail chains. Witco has nine large format stores in Chennai and Bangalore.

Eventually, he expects personal products to contribute 40 per cent of revenues from the 30 per cent at present, while the luggage portfolio’s contribution will decline to 50 per cent from the 60 per cent now.

“With this reworked model we will look at private equity funding to expand to newer cities – any city with an airport is our target,” he explains.

The company could shed up to 20 per cent stake to a PE fund to fund its expansion. The slowdown in air travel, especially in the software sector, has had a direct impact on sales of premium luggage.

“When software was booming, we could have spikes of 30-40 per cent a month but now we are seeing declines of 20-30 per cent every month,” says Mr Harris, emphasising that this is seen most in a city such as Bangalore.

A few years ago when Witco, which began as West India Plastic Trading Co, saw luggage moving from being an utility item to a fashion statement, it got out of the economy luggage segment and focused on being a premium retailer with brands such as Samsonite, Kipling, Jansport, Giordano, Delsey and Fiorelli, among others.

But, now the premium segment is declining by 20 per cent while the mid and budget range of luggage is growing by 10 per cent.

Says Mr Harris, “We see a significant decline in offtake, both value and volume, in the premium segment. Mid-market and budget is growing, though we see people are clearly trading down.”

The overall luggage market stands at Rs 2,500 crore, of which the premium segment is Rs 250 crore, mid at Rs 750 crore, while the budget segment is Rs 1,500 crore.

Bulk of the market, Rs 1,500 crore, is constituted by unbranded players.

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