A tsunami of travellers will hit the skies this December. They should thank Bernard Sadow for the ease of their journey. Most of the jet-setters would not have heard of Sadow. This is a pity. There is a strange symmetry to the revival of travel in 2022. It will coincide with the 50th anniversary of the patenting of the rolling suitcase.
It is surprising that rolling suitcases are so recent. The wheel was invented over 5,000 years ago. Jet travel took off in the 1960s. We put a man on the moon in 1969. But, it was only in 1972 that the first suitcase with wheels was patented.
Before the rolling suitcase was common, bags had to be carried. It was difficult to lug the suitcases without support. A trip to the airport was like a gym workout for most people, unless you could find a porter. There were more porters than customs officials in some airports. It was especially hard for children to travel in those days. They needed to find a porter.
The credit for this invention is with Bernard Sadow, an American luggage executive. In 1970, he lugged two suitcases that weighed 50kg each. He was returning to New York from a holiday on the Caribbean Island of Aruba.
At customs, Sadow noticed that a worker was rolling a heavy machine on a wheeled skid. Sadow felt that he could lighten the load. Adding wheels to suitcases would make them easier to move. On his return to work, Sadow put wheels onto a suitcase. The wheels were on both sides of the suitcase. It worked well. But, you could not lift the suitcase like the modern version. The suitcase could be pulled with a strap.
He applied for a patent in 1970 and received in 1972. The Sadow suitcase was not successful. Air travel was taking off literally and figuratively. But, rolling a suitcase was bizarrely considered a feminine pastime. Macho department stores were reluctant to sell Sadow’s product.
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Rolling suitcases were a niche product till 1987. A tinkering with Sadow’s original idea did the trick. Robert Plath was a pilot with Northwest Airlines in the US. He flew 747 Jets, but his superpower was not in the air. It was on the ground as a tinkerer in his garage.
He was frustrated with carrying suitcases. He added two wheels to the edge of the suitcase and a long handle. This made it easier to lug than the Sadow model, which had just a plastic handle on four wheels.
Plath called the suitcase the Rollaboard. By the late 1990s, he quit flying to start a luggage company. It was called Travelpro International. The sky was the limit for the sales of the new product. Flight attendants were the first to popularise its use. Today, bags with two wheels and a handle are everywhere.
If Plath’s gift was in design, Samsonite’s was in branding. Samsonite was founded in 1910, but it assumed the Samsonite name in 1965. It was a pathbreaker in creating branded luggage. It figured that travellers would want their bags to become a fashion statement. Travellers could stamp their mark at the check-in counter.
There are three brands representing nearly 90% of its sales. Most travellers will recognise its brands Samsonite, Tumi and American Tourister. Samsonite is the first name associated with branded luggage.
Samsonite is listed in Hong Kong. Its stock is down 45% from its pre-pandemic peak. The sales were wiped out by Covid-19. The pandemic meant that suitcases were gathering dust.
Samsonite sales could take off in FY23. The market expects Samsonite’s FY2022 ebitda to be well below 2019 levels. However, ebitda could reach FY19 levels in FY23. If so, Samsonite is trading at just 8x EV/Ebitda. This is close to it’s all-time low.
Samsonite may be about to launch its own innovation. Bags sometimes get lost. Samsonite and tech firm Panasonic have joined hands to design a smart bag. This is a suitcase that can be tracked and located. Smart suitcases are a rarity like rolling ones once were. It could become common sooner than you expect. Investing in Samsonite stock may be as secure as the suitcases.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era. He does not hold any position in the stocks mentioned in this column
