Ace: a travel solutions business

Ace is Japan’s biggest home-grown luggage firm, despite losing both Samsonite and Tumi over the last decade. As well as signing replacements, it is also investing heavily in its own brands with plans to globalise distribution over the next few years with the help of US subsidiary Zero Halliburton and Italian partner Pelletteria Clio.

Ace, Japan’s leading luggage business, plans to create a complete travel solutions business. Since losing its Samsonite license and control of Tumi Japan during the past decade, it has signed new brands such as Offerman and acquired Zero Halliburton. It has also tied with Pelletteria Clio, the Italian bag manufacturer, to create an entirely new brand for worldwide distribution called F.Clio – the latest store opened in Marunouchi last month – in order to reduce its dependence on the men’s market. However, competition at home and the loss of such major brands has meant significant retrenchment, with sales staying largely flat since 2007 at around ¥28 billion.

Travel luggage is still Ace’s core business and it has been building distribution for its Proteca, Ace Gene and +Style brands. Luckily for Ace, the mix of government promotion and a weak Yen has led to a surge in foreign tourists to Japan, and with so much shopping being done, buying additional luggage to haul it all back is common, particularly its Japan-made trolley suitcases. On the other hand, with Ace manufacturing more than 8 million items in China each year, the weak Yen has also had a dramatic impact on profits, as well as reducing demand with fewer Japanese travelling abroad – down 6% in 2013.

Ace has two key aims over coming years. First, it will build a portfolio of businesses that fit with its efforts to create a travel solutions business. The US travel store, Flight 001, is a core element, with three stores already open here since launching last year and plans for 40 within four years. Flight 001 is in essence a select shop for travel, offering a diverse array of travel accessories and luggage including Ace brands, but Ace also plans to create a store branded line of luggage and travel accessories once the chain is larger, and feed back supply to the US stores too.

Second it is making a bigger push overseas, with much of the focus on expanding Zero Halliburton; Ace opened flagship stores in New York, Singapore, Seoul, and Bangkok last year to boost brand awareness. It will add more in other Asian capitals including Hong Kong this year. It will start opening stores for the Proteca brand in Asia too, emphasising the Made in Japan provenance.

With profits under pressure, Ace is overhauling its supply chains. At the moment almost all manufacturing is done in Japan or China but Ace plans to set up production in South East Asia, possibly Myanmar, to reduce costs and risk.