With the advent of budget airlines, air travel has become increasingly affordable. This certainly spells good news for Catalistlisted Travelite Holdings (Travelite), which is engaged in the marketing, sale and distribution of a broad range of merchandise catering to the travel, business and lifestyle needs of consumers from all walks of life.

Under the astute stewardship of executive chairman TJ Thang, who incidentally started out as a salesman selling Samsonite luggage before establishing his own business, Travelite made its trading debut in May last year at $0.30 apiece. In a short span of two months, the company scaled to an all-time high of $0.60 in July before making its descent.

Designed for various lifestyle needs

BRAVING THE STORM
Unlike recent initial public offerings such as Joyas International, Li Heng Chemical Fibre and Roxy-Pacific, which wereunfortunate victims of the market volatility and gloomy sentiment, Travelite has emerged relatively unscathed - predominantly due to its small public float and illiquidity. Year-to-date, the company has fallen by 20% to $0.40. Nonetheless, it is still hovering at a 33.3% premium over its offer price.

For the uninitiated, Travelite carries a comprehensive array of lifestyle and travel bags under various established brandnames, including Crocodile, Pierre Cardin, Beverly Hills Polo Club, Camel Active, Elle, United Colours of Benetton, Sisley and Hedgren, as well as under its own house brands, namely Hunt International and Bozaki.

“Travelite’s strength lies in its vast distribution network,” TJ told Shares Investment (Singapore) in an exclusive interview. “We have over 300 points of sale in Malaysia and Singapore alone for luggage and accessories, in addition to wholesale distribution to countries like Indonesia, Brunei, the Philippines, China and the Middle East,” added TJ.

Besides operating sales counters in major departmental stores in Singapore and Malaysia, Travelite also operates a chain of ‘Travel For All’ and ‘Gear Zone’ specialty stores with a network of more than 20 luggage specialty stores in Malaysia and Singapore.

ADDING FEATHERS TO CAP
In line with its product range expansion initiatives, Travelite acquired a 100%-stake in YGM Marketing (YGM) for $14.2m in November 2007. Boasting over 40 years of experience in the manufacturing and distribution of menswear, apparels and accessories, YGM has obtained several licences for prominent international brands like Arnold Palmer, Ashworth, Daniel
Hechter, Gianni Valentino, Pierre Cardin and Van Heusen.

Fortifying its reputation as one of the leading distributors of menswear in Singapore, YGM has over 140 points of sale, including a loyal partnership with leading departmental stores such as Metro, Robinsons, OG, Isetan, Takashimaya and Tangs.

Not content to rest on its laurels, Travelite subsequently completed the purchase of a 70%-stake in Fashion Street for $2.55m earlier this year in January. Notably, Fashion Street owns U.R.S & Inc, the leading ladies’ shoes and bags retailing chain in the region, and is the sole distributor and retailer of the luxurious Tumi brand in Singapore and Malaysia since 1999.

“Through Tumi, we hope to gradually move towards the highend travel bags segment. We would also be looking at possibilities of extending our product range to encompass other fashion and lifestyle products such as watches and ladies fashion,” TJ remarked.

ENLARGING OVERSEAS FOOTPRINT
Counting Mainboard-listed Ossia International as its industry comparable, Travelite derives approximately 90% of its turnover from Singapore and Malaysia. In order to increase its geographical coverage and diversify its revenue stream, the company is escalating marketing efforts to attract more distributors from China, Thailand, Dubai and Vietnam.

“We see huge potential in these populous markets with growing affluence and improving lifestyles of their city dwellers. However, we need to be extremely careful in choosing the right distributor,” commented TJ.

During the interview, TJ highlighted rising overheads, particularly in Singapore, as a major challenge going forward. But he is quick to mention that around 70% of its revenue come from sales counters in departmental stores, which do not involve any rental payment. Furthermore, out of the remaining 30%, the bulk of it is contributed by retail stores in Malaysia.

Having changed its financial year-end to 31 March, Travelite raked in net earnings of $3.14m, a 33.2% increase over the previous corresponding period, for the twelve months period ended 31 December 2007. This was mainly attributable to a robust 38.4% revenue growth, from $25.1m to $34.7m. According to TJ, the company’s revenue included a one-month contribution from YGM.

With upcoming major developments and events such as the integrated resorts, the Formula One Grand Prix and the 2010 Youth Olympics, Singapore’s tourism industry will inevitably receive a much needed boost. As for Travelite, the company appears poised to ride on this wave, while continuing with its brand, distribution network and product range extension endeavors.

Strong brand portfolio