GOING PLACES

Travel downturn doesn’t deter luggage maker Samsonite from long-term goals, says Asia chief Paul Melkebeke.

Like many people around the world, Paul Melkebeke is itching to hop on a plane, tuck into some airplane food, catch up on some work, and land in a new location in a different time zone. In 2019, the president of Asia-Pacific and the Middle East for Samsonite International spent 198 nights away from home. Mr Melkebeke didn’t hit that number in 2020, and who knows if he will be anywhere close to that in 2021?

In fact, the Belgium-born, Hong Kong-based father of three was supposed to be on the first flight to Singapore in November 2020. But the suspension of the travel bubble between Singapore and Hong Kong put paid to it. This interview, like Mr Melkebeke’s many other meetings, had to be conducted over Zoom.

The 62-year-old executive, who has spent his entire career with Samsonite, took on the role of president at the start of 2021. Prior to this appointment, he was the chief supply officer responsible for the company’s global supply chain strategies, including the management of its manufacturing operations and its thirdparty supply chain and logistics. His job took him to Samsonite’s three factories in Belgium, Hungary and India, and also to original equipment manufacturer (OEM) plants all over Asia.

“I spent over 150 nights away from home, but that is exciting because regardless of the role, you need to be where the action is happening. I don’t believe you can do business over WhatsApp or Zoom, which cannot ever replace face-to-face interaction and interpersonal contact,” he says.

“In our business, we need to see how people shop, to observe their body language, their faces when they see a product and down to how they hold the product. Our staff need to help customers buy the right product.”

His market research even happens at the conveyor belts in the arrival halls of airports and railway stations. “It is interesting for me to study the conveyor belts, so I can see what kinds of products people are using; where our market share is; spot trends, such as the preference for hard or soft cases or duffel bags. I see where people are coming from and how they travel,” he explains.

So how does he feel having his wings clipped, especially coming from the travel retail industry? “It feels different, and I regret that I cannot travel,” replies Mr Melkebeke. “I miss the contact with our people, be it at the factories or on the shop floors. That’s what I miss most.”

He is counting down to the day when travel restrictions are lifted. “There will be ‘revenge travel,’” he says with a laugh. “I’ll go out and meet everyone across all the different markets.”

Turning serious, Mr Melkebeke adds: “Not being able to resume international travel is only temporary and we should not allow ourselves to be distracted.”

Staying focused on the group’s medium- and longterm goals — extending its market leadership and drive growth by tapping Samsonite’s century-plus heritage of innovation, and developing new products that meet consumer needs — is something that Mr Melkebeke reiterates regularly during the interview.

While Samsonite is the world’s best-known and largest lifestyle bag and travel luggage company, it also owns brands that specialise in business and computer bags, outdoor and casual totes, travel accessories and slim protective cases for personal electronic devices, such as Tumi, American Tourister, Speck, Gregory and Hartmann.

SALES RECOVERING

Travel restrictions and mandatory lockdowns taking place around the world for much of 2020, and the temporary closure of most of the group’s wholesale and retail points of sale during the second quarter of last year, had an impact on the brand’s net sales across all regions, brands and distribution channels.

After plunging by almost 81% in April and 80% in May, the group’s net sales began to recover in June, decreasing by 74% year-on-year. The figures have since continued to improve each month, with July, August and September recording successively smaller sales declines of between 60% and 70%.

The encouraging trend continued into the fourth quarter of 2020, though the pace of improvement has slowed due to a recent resurgence in Covid-19 cases in a number of markets.

In Asia, the group’s net sales improved to US$122.9 million in the third quarter of 2020, up from $79.9 million in the second quarter. China continued to lead the recovery, while other key Asian markets showed sustained improvement during October 2020.

Mr Melkebeke says that the group had to “rightscale our organisation”. It worked with its factories to align its production output with projected demand. The group had to close some stores, and shift its focus on distribution channels and product categories that have been less affected by the pandemic.

Like many other retail brands, Samsonite saw its e-commerce sales grow much faster than before, thanks to the pandemic. “E-commerce isn’t new to us; in fact, we were one of the first travel retail companies to offer it, and it has been one of our key strategies for a number of years. The pandemic has definitely accelerated its growth,” says Mr Melkebeke. But he also adds: “While it has grown, we do not see e-commerce as the only sales channel”.

While online shopping for its products will continue, that doesn’t mean the end of Samsonite’s retail stores or its counters in department stores, he says. “What we are going to see is the shopping experience will be much more seamless online and offline.”

He cites examples of products being ordered online and customers picking up the items at the stores, which works well since shops may not have the space to display the entire range. Then there is also the option for customers to visit stores where staff can give better advice on the products, and have the items delivered to their homes.

DIVERSE PORTFOLIO

Turning to the possibility of more brand acquisitions, Mr Melkebeke reveals there is nothing in the pipeline, but he doesn’t rule out the prospect should the right opportunity come up.

“As a company, we always make sure we have a diversified portfolio of brands and categories,” says Mr Melkebeke. The group’s diversified portfolio helped it tide over the pandemic.

According to its third-quarter 2020 financial report, its non-travel brands such as Gregory and Speck performed better than its travel-focused counterparts. “Since international travel isn’t possible, people turned to hiking, and thus they need backpacks,” notes Mr Melkebeke.

To meet the needs of its consumers, new products were introduced, such as a range of anti-microbial travel essentials that include pouches for masks, luggage covers, luggage handle wraps and packing cube sets. Its innovation teams are also actively working with vendors on new antiviral technologies that it hopes to be able to incorporate into its products in the future.

“As a leader you have to be vigilant and act quickly on what’s changing. The competition will not wait, and also these are things that customers are expecting from a brand like us,” says Mr Melkebeke.

International travel may have paused but the group has not stopped investing to meet future needs. “What we are seeing is temporary, even though we don’t know how long this temporary pause is,” says Mr Melkebeke. “But we are developing products that we are convinced people will need once the pandemic is under control.”

Two products that Mr Melkebeke is excited about are the Konnect-I backpack and the Proxis range of luggage. The former uses Jacquard by Google technology integration that enables control of the user’s smartphone with a simple hand gesture on the backpack’s interactive strap, while the latter is made from Roxkin, a material that was developed in-house and offers strength, resilience and lightness.

He believes consumers will be even more conscious about the quality, design and durability of their luggage when making a purchase. “The last thing they want is luggage that’s difficult to deal with,” he says. “With a Samsonite, they can trust that travel will be seamless.”

While innovation remains important to the group, it continues to have an eye on sustainability.

Currently, some of the products have outer fabric using yarn that is made from recycled plastic drinking bottles; hang tags with product information are made from paper from responsible sources, and in Asia, plastic-foam packaging is replaced with folded cardboard.

The group publishes an annual Environmental, Social and Governance report, and has also set goals including powering its operations with 100% renewable energy and achieving carbon neutrality for its operations by 2025.

“Our sustainability initiatives are appreciated by our partners too. We are a company with a lot of values and with a responsibility to the community too,” says Mr Melkebeke.

Since 1995, he has been involved in the group’s Asia operations, starting with the setting up of Samsonite factories in India and China. After 10 years of flying between Europe and Asia, he moved to Hong Kong in 2005.

Over the last 26 years, he has witnessed several crises. Samsonite’s factories in India and China opened in 1997, the year the Asian financial crisis hit. “That was our welcome present,” says Mr Melkebeke, wryly. Then there was 9/11, Sars and the global financial crisis of 2008.

The ongoing Covid pandemic has hit the deepest, according to Mr Melkebeke. “Every crisis is different but we know what we have to do. React fast, sometimes overreact a bit, but you have to do the right things for the business. Never lose sight of the mid- and longterm strategies.”

Despite the uncertainty of the near future, Mr Melkebeke says he sees more opportunities than concerns. “Recovery in Asia is faster than anywhere else. There’s a big and young population in China, India and Indonesia that we can reach out to.”

I don’t believe you can do business over WhatsApp or Zoom, which cannot ever replace face-to-face interaction and interpersonal contact

What we are seeing is temporary. … We are developing products that we are convinced people will need once the pandemic is under control

Consumers want to see and touch our products. I don’t believe that we can exist only online

YOUNG CONSUMERS

While Samsonite is a household name for many, Mr Melkebeke says that not all young people know of it. “There’s a new generation of people who are travelling for the first time. We’ve sold to their mums and pops but now we have to convince these kids to buy.”

To reach out to new consumers, the company is turning to social media platforms such as TikTok, but at the same time not forgetting its retail stores. “Consumers want to see and touch our products. I don’t believe that we can exist only online,” he says.

Mr Melkebeke adds: “We also need to have the right products, to have products that are always evolving.”

A room in his home is filled with Samsonite products — he has different bags and luggage items depending on the requirements of a trip.

“But what’s important for me is that I am using products that are still under development. I want to be the first customer so that I can give feedback to the designers and marketing team,” he says.

He still has his first Samsonite luggage, stored safely away in his home in Belgium, which he bought with his first paycheque back in 1983. The grey-coloured case is made of ABS plastic and has four wheels. “It is so heavy to lift and I wonder how we ever sold products that were that heavy,” he says, with a chuckle.

Mr Melkebeke adds: “It is a testament that shows how Samsonite has evolved to make products that are much lighter now, without sacrificing durability and quality.”