Sleek. Stylish. Samsonite?
Marcello bottoli had a gilded career as the chief executive of Louis Vuitton when, three years ago, he left to run Samsonite Corp. It was a move from one of the world's great luxury brands to a company that had been mistreated by its private investors, was still recovering from a sharp drop in business after September 11, and had, in fact, come dangerously close to declaring bankruptcy for the second time in a decade. Bottoli, cosmopolitan, disciplined, and an alumnus of Procter & Gamble Co. (PG ), described Samsonite as a sleeping beauty.
The same could be said of many once-troubled brands: Coach (COH ), Burberry, Cadillac—all had great legacies but lost their relevance over time. And Bottoli's plan is obvious; even he says so. He wants Samsonite to find its place in the expanding world of accessible luxury.
Since it was founded by Jesse Shwayder almost 100 years ago in Denver, Samsonite has been a near-complete reflection of the best and worst inclinations of the business world. Run by the Shwayder family until the 1970s, the company then had a series of owners who embodied the financial temperament of the times. Samsonite went through a leveraged buyout and was burdened by debt; it was taken over by private-equity investors and forced to survive on limited cash; it's been put into bankruptcy, gone public, and been delisted. Now Samsonite is in the hands of new private-equity investors (Ares Management, Bain Capital, and the Ontario Teachers' Pension Plan) who brought in Bottoli and gave him a piece of the business (management owns 10% of the company).
As much as Samsonite seems so iconically American, it is also surprisingly global. By the late 1990s, Samsonite's image in America was no better than, say, Chevy's (the luggage was, some former employees recall with dismay, even sold in Wal-Mart (WMT )). But in Europe it was always considered a premier brand, and the business success it experienced there may well have saved the company during its darkest days. Sixty percent of Samsonite's billion or so dollars in sales are outside the U.S. Partly because of that, Bottoli has established the executive office in London, where 12 nationalities will be represented among the 50 people working there. The owners, ready to cash out, want to take the company public again, perhaps this spring. This time, though, they would like Samsonite to be traded on the London Stock Exchange. That would make it among the first U.S. companies to have its primary listing outside the country. "But," says Bottoli, "we stick to and are proud of our American heritage."
Bottoli, who is 45, also hopes to give Samsonite a modern sensibility and fashion edge. To that end, he has brought in designers such as Alexander McQueen, the haute couture celebrity, to create signature lines of Black Label luggage. Bottoli hired the company's first creative director, who has gone back to the archives to create a vintage collection. The company is starting to sell leather shoes (they've been available in Italy for years), wallets, and stationery. Bottoli has doubled the amount Samsonite spends on marketing and persuaded inveterate traveler and showman Richard Branson to appear on the company's behalf. Coming up with this approach, Bottoli observes, was hardly rocket science. "Louis Vuitton does it every day," he says.
Bottoli's plan may be familiar, but it also has the advantage of being popular with employees (as well as most brand experts). Bottoli, like many chief executives brought into companies beset by problems, had to determine how thoroughly to upend the status quo, staff included. Not very, he decided. "I need some people to shake things up," he says. "But I want the right balance of old and new." Frank Steed, a former president of Samsonite usa and now a licensee for the company, says: "People there are trying to move along as fast as Marcello wants." Sales for the first nine months of 2006 were $784.4 million, 9.3% higher than the previous year's.
Indeed, Samsonite is doing well enough that the owners were treated to a bonus in December. The board of directors approved a $175 million cash distribution, paid for in part by taking on more debt.
By Susan Berfield