Samsonite picks up eBags for $105M

Dive Brief:

Luggage maker Samsonite International will acquire online luggage and travel accessories retailer eBags for a cash consideration of $105 million. The acquisition is currently expected to be completed in the second quarter of 2017, subject to the satisfaction of certain customary closing conditions.
EBags, founded in 1998, sells a wide range of goods, including school backpacks, handbags and apparel, from a variety of brands as well as its own label.
Samsonite said the acquisition is part of its strategy to accelerate its e-commerce growth and strengthen its existing digital capabilities.

Dive Insight:

EBags is one of the survivors of the original dot-com boom of the late 20th century, managing to survive the subsequent dot-com bust (as well as the hit that the travel industry suffered in the wake of 9/11) by diversifying its merchandise beyond luggage. Unlike other e-commerce ventures of the era, which burned through their capital before they reached scale, eBags kept its nose to the grindstone, added to its own branded product lines, kept its e-commerce operations up to date, and earned props for excellent customer service.

The Samsonite acquisition brings eBags full circle — the startup was founded by former employees of Samsonite and other luggage companies who were intent on disrupting luggage retail — and promises to be a win-win for each company. EBags will have the backing and reach of Samsonite’s global resources and reputation, while Samsonsite gains a ready avenue to expand its online presence.

“As the No. 1 online luggage and bag specialist in the U.S., eBags is an excellent complement to Samsonite’s existing business,” Samsonite CEO Ramesh Tainwala said in a statement. “The acquisition provides us with a strong platform to significantly expand our direct-to-consumer online presence, not just in North America but around the world.”

EBags recorded net sales of $158.51 million for the fiscal year ended December 25, 2016, an increase of 23.5% from the $128.3 million in net sales recorded during its previous fiscal year.