VIP INDUSTRIES
LIMITED
“Successful acquisition of a well-known international
brand offers significant synergies as well as much
desired gateway to the world market. As London
is the hub for world market, successful presence
in UK market is very critical in achieving VIP's
global aspirations. We believe we are off to a good
start with successful acquisition of Carlton and
promising 2 years of operations, but the long
journey has just begun.”
Company Background
VIP Industries Ltd. is the flagship company of the
DG Piramal Group. Established in 1971, it is a
leading luggage manufacturing company, which
manufactures strollys, suitcases, executive cases,
backpacks and other hard and soft-sided luggage.
It owns reputed brands such as VIP, Alfa, Footloose
and Buddy .
It has two manufacturing units in India and
various subcontract operations in China and
Indonesia. Currently, it has a workforce of nearly
2000 people.The company recorded net sales
of 3.2 billion units for the year 2005-06.
VIP is a well-known and reputed brand name
in India.VIP has been increasing its presence
in world markets in the luggage industry.The
company has operations across the globe in five
continents. It has offices in the USA, South Asia,
Middle East, Africa and Europe.Worldwide,
VIP products are sold across 1300 retail outlets
in 27 countries.
It had an export turnover of US$ 8.16 million in
the year 2004-05, representing an increase of 145
per cent over 2003-04 when the turnover stood at
US$ 3.25 million . Currently, it exports its products
to West Asia, Europe, the USA, and select African
and South East Asian countries.
VIP Industries Limited in the UK
VIP operates in the UK through Carlton Travel
Goods Limited. Carlton is a fully owned subsidiary
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 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
Sicherheit, Germany; and Stichthing Ivha, the
Netherlands.
Carlton's revenue witnessed a year-on-year growth
of 90 per cent for the year 2005-06, and it is
expected to grow by 50 per cent for the year
2006-07.
Factors for Success
Synergy with Carlton
Carlton has been a world leader in the
manufacture of quality luggage for approximately
30 years.Through the acquisition of Carlton,
VIP gained access to those European markets
in which Carlton already possessed strong
brand recognition. Carlton was also in possession
of several intellectual property rights.This buyout
provided VIP with a lucrative passage into the
high-growth European market. Moreover,VIP has its
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manufacturing plants at India and China, which are
the low-cost destinations from where it sources
its products to all export locations such as the
UK and the USA.Thus, the combined synergies
of Carlton's strong brand and VIP's low
manufacturing costs provide VIP with an edge
over its competitors.
High-end Research and Development
Carlton is a leader in design innovations in
luggage manufacture. It has won many awards
from reputed international bodies as a testimony
to its high quality product innovations. In addition,
VIP has a fully equipped world class Research
and Development (R&D) centre that constantly
endeavours to provide superior travel products.
This focus on constantly upgrading product quality
has helped VIP to successfully compete in the
intense European luggage market.VIP has allocated
an R&D budget that is approximately equal
to 1.7 per cent of its total sales per annum.
 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

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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