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Diversification Increases Profits

Posted March. 14, 2006 03:37,   


Samsonite and Mont Blanc two of the world’s most famous luggage and fountain pen brands, respectively.

But the two companies are currently trying to expand their brand image beyond just making luggage and fountain pens, and into the luxury fashion market. Luggage and fountain pens brought the two companies to where they are, but now are making it difficult for them to transform.


“Because our products are solid, customers usually use them for more than 10 years,” said Seo Bu-seok, a Samsonite Korea representative.

Samsonite, an American company, is a 96-year-old luggage company and earned $903 million (about 903 billion won) in sales globally last year.

The company, named after Samson from the Bible, sells solid, practical luggage. Accordingly, its image has not depended on fashion and high class trends.

Samsonite’s change has been made in all areas such as personnel, products and distribution.

In 2004, Marcelo Bortoli, ex-CEO of Louis Vuitton, was named as the company’s U.S. head office CEO, and Kwane Mckain, a former senior designer from Loewe, a famous fashion brand, was named creative director in charge of design.

“We are focusing on upgrading our current image as a strong bag to a high-class brand-name,“ Seo said.

Mont Blanc: Beyond Pens?-

The pen maker Mont Blanc is also trying to undergo a transformation.

Mont Blanc belongs to Richemont, a holding group that owns some of the most prestigious names in the luxury industry, including Cartier and Chloe. It is a deluxe fountain pen brand marking its centennial this year. Its fountain pens are favored by company executives.

However, this image has hurt Mont Blanc among women consumers. The fact that its products are neglected by women, who are big consumers in the fashion market, are a big weakness.

Mont Blanc launched a luxury jewelry line last October and invited Lee Na-young, a famous movie star, to its first launch event.

To mark its centennial anniversary, Mont Blanc plans to introduce a jewelry line for women, leather fashion products, and transform itself into a high-class fashion brand.

Song Ji-young of Euro Trade Company, which imports Mont Blanc products, says, “We are making efforts to establish the brand’s image among women by supporting various women-related events.”

Park Jeong-hyun, a researcher at the LG Economic Research Institute, explained, “Fashion differentiates added value in brands. For example, if Samsonite introduces the concept of fashion to its luggage, the cycle of its products will speed up and its profits will increase.”