VIP Industries acquired Carlton Travel Goods in 2004 to gain access to the European luggage market. This provided synergies through Carlton's strong brand in Europe and VIP's lower manufacturing costs from facilities in India and China. Carlton has experienced significant revenue growth since the acquisition. Going forward, VIP plans to leverage Carlton's premium brand positioning and both companies' experience in the luggage industry to expand globally.

1. VIP INDUSTRIES
LIMITED
“Successful acquisition of a well-known international 2000 people.The company recorded net sales
brand offers significant synergies as well as much of 3.2 billion units for the year 2005-06.
desired gateway to the world market. As London
is the hub for world market, successful presence VIP is a well-known and reputed brand name
in UK market is very critical in achieving VIP's in India.VIP has been increasing its presence
global aspirations. We believe we are off to a good in world markets in the luggage industry.The
start with successful acquisition of Carlton and company has operations across the globe in five
promising 2 years of operations, but the long continents. It has offices in the USA, South Asia,
journey has just begun.” Middle East, Africa and Europe.Worldwide,
VIP products are sold across 1300 retail outlets
Company Background in 27 countries.
VIP Industries Ltd. is the flagship company of the It had an export turnover of US$ 8.16 million in
DG Piramal Group. Established in 1971, it is a the year 2004-05, representing an increase of 145
leading luggage manufacturing company, which per cent over 2003-04 when the turnover stood at
manufactures strollys, suitcases, executive cases, US$ 3.25 million . Currently, it exports its products
backpacks and other hard and soft-sided luggage. to West Asia, Europe, the USA, and select African
It owns reputed brands such as VIP, Alfa, Footloose and South East Asian countries.
and Buddy .
VIP Industries Limited in the UK
It has two manufacturing units in India and
various subcontract operations in China and VIP operates in the UK through Carlton Travel
Indonesia. Currently, it has a workforce of nearly Goods Limited. Carlton is a fully owned subsidiary
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2. of VIP Industries.VIP acquired Carlton in April 2004
to gain access to European markets.
Carlton handles all the UK operations of VIP and
markets the products of both VIP and Carlton
across the whole of Europe. Currently, it has
15 employees based in its office near London.
Carlton's production activities have been shifted
to its Nashik plant in India so as to enhance
the plant's utilisation capacity. Carlton products
are designed in the UK and warehoused at
three locations across the UK and Europe.
The marketing and sales department of Carlton
Travel Goods approves its designs.The company
has its sales offices in London, Dubai, Mumbai
and Hong Kong.
Carlton has technical excellence in the manufacture
of trendy luggage. It has won several awards for
its innovative designs from big institutions such
as British Design and Art Direction, the UK;
Laboratorie National D'Essai, France; Geprifte manufacturing plants at India and China, which are
Sicherheit, Germany; and Stichthing Ivha, the the low-cost destinations from where it sources
Netherlands. its products to all export locations such as the
UK and the USA.Thus, the combined synergies
Carlton's revenue witnessed a year-on-year growth of Carlton's strong brand and VIP's low
of 90 per cent for the year 2005-06, and it is manufacturing costs provide VIP with an edge
expected to grow by 50 per cent for the year over its competitors.
2006-07.
High-end Research and Development
Factors for Success Carlton is a leader in design innovations in
luggage manufacture. It has won many awards
Synergy with Carlton from reputed international bodies as a testimony
Carlton has been a world leader in the to its high quality product innovations. In addition,
manufacture of quality luggage for approximately VIP has a fully equipped world class Research
30 years.Through the acquisition of Carlton, and Development (R&D) centre that constantly
VIP gained access to those European markets endeavours to provide superior travel products.
in which Carlton already possessed strong This focus on constantly upgrading product quality
brand recognition. Carlton was also in possession has helped VIP to successfully compete in the
of several intellectual property rights.This buyout intense European luggage market.VIP has allocated
provided VIP with a lucrative passage into the an R&D budget that is approximately equal
high-growth European market. Moreover,VIP has its to 1.7 per cent of its total sales per annum.
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3. Build on a Premium Brand
VIP is targeting at establishing Carlton as a
'premium' brand and replicating its success in the
UK to the rest of the world. Carlton has many
premium and super-premium brands in its product
portfolio such as ebony, sonic and ergo.VIP has also
acquired a licence from Delsey, a premium brand
luggage manufacturer from France, which will help
it to market its premium range of products across
the globe, particularly in Europe.
Experience in the Luggage Industry
Together,VIP Industries and Carlton have been
operating in the luggage industry for a significant
period of time. Since its inception,VIP has sold over
60 million luggage pieces to consumers across the
globe.VIP's experience in this industry was
successfully leveraged by Carlton in spreading
its reach in the UK market.
Carlton’s Revenue (US$ million): 2005-07
20
17.3
Revenue (US$ million)
16
12 11.3
8 6.5
4
0
2004-05 2005-06 2006-07 E
Source: Primary Research
Future Plans
Emphasis on Product Innovation
VIP is backed by its high-end R&D centre that
constantly works towards providing superior
solutions to customers.The company offers a
varied range of innovative products to cater to
diverse market requirements. It has plans to further
strengthen its R&D and unleash a global range of
products matching the best standards in the global
luggage industry.
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