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Latha Venkatraman
Ajita Shashidhar

Mumbai , Nov. 16

VIP Industries targets sales worth Rs 90 crore this fiscal from its soft luggage portfolio. Soft luggage, which currently contributes 35 per cent to the company's overall revenue, would in the coming years contribute close to 75 per cent, said Mr Sudhir Jatia, Managing Director, Blow Plast and Director, VIP.

Mr Jatia said that the soft luggage market was growing nearly 35 per cent. "Not only is travel booming, the penetration of soft luggage has also been on the rise. The segment, which has always been considered as premium, is now available at affordable price. At the same time there is a segment of customers for whom it is the styling which matters, and they are prepared to pay a premium. We have a product costing Rs 12,000 under the Delsey range." VIP Industries reported Rs 304.73 crore turnover for the year ending March 2005.

The company's focus would be on soft luggage as it helps drive sales. "It also offers us opportunities to play around with styles," Mr Jatia said.

Growth in the hard luggage segment has remained stagnant but this segment contributes to exports, as VIP and Samsonite are the only two hard luggage brands in the world.

The company has over the past few years moved its sourcing activities to China. In fact, it sources almost 85 per cent of its products from that country. "This has enabled us to source better designs," he said. Outsourcing has also facilitated improvement in profit margins for soft luggage.

Mr Jatia said that with the luggage market booming, the company wants to position itself as a lifestyle brand. It recently launched a collection for women called Aura and a business collection called Matrix. In the pipeline are four new collections, slated for launch around December. "We spend around Rs 25 lakh every year on research pertaining to product development, sales and marketing. We also have our own design studio."

In retailing, the company plans to focus more on standalone stores featuring all its products. It plans 35 stores across the country, featuring a mix of VIP, Delsey and Carlton products.

The company acquired the UK-based Carlton brand last year. Mr Jatia said that apart from Singapore and West Asia, where it would retail under the VIP brand name, the products would feature under the Carlton brand in the rest of the world. "VIP, as a brand, has given up its international ambitions. Everything would be done under Carlton," he said.

The company would look at women's handbags as a part of its product portfolio but not in the immediate future. "The growth in the ladies bag segment in the price range of Rs 500- Rs 5,000 is huge. There is a space for a brand in this range. But we are not looking at this segment now, not at least for two years," Mr Jatia said.

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