Sam­sonite sees Tumi sales dou­bling

China Daily (USA) - - BUSINESS -

Sam­sonite International SA said it ex­pects its lux­ury travel prod­ucts brand, Tumi Hold­ings Inc, to dou­ble sales to $1 bil­lion as the world’s big­gest lug­gage maker pushes the newly-ac­quired com­pany into the global mar­ket with new, light­weight prod­ucts.

Sam­sonite fore­casts Tumi dou­bling its rev­enue, which stood at $548 mil­lion in 2015, in as lit­tle as three years, with the lux­ury brand launch­ing new prod­ucts us­ing Sam­sonite tech­nol­ogy by the end of next year, Sam­sonite Chief Ex­ec­u­tive Of­fi­cer Ramesh Tain­wala said on Tues­day in an in­ter­view. Sam­sonite plans to dis­trib­ute Tumi’s prod­ucts in China and ex­pects strong growth there, he said.

“Tumi’s travel lug­gage seg­ment is not that strong, es­pe­cially in Asia and Europe, be­cause they lack tech­nol­ogy to make light­weight lug­gage. Sam­sonite has the tech­nol­ogy,” said Tain­wala.

“The re­sult of the ben­e­fit that Sam­sonite pro­vides to Tumi in terms of tech­nol­ogy will be more vis­i­ble in 2018.”

Sam­sonite’s $1.8 bil­lion ac­qui­si­tion of Tumi, which was com­pleted ear­lier this month, so­lid­i­fies its po­si­tion as the top lug­gage maker and launches it into the pre­mium bag­gage and travel ac­ces­sories seg­ment. The 106-year-old com­pany has been ag­gres­sive with ac­qui­si­tions since it was listed in 2011, ex­pand­ing with the pur­chases of lux­ury bag mak­ers Hart­mann and Li­pault as well as Speck Prod­ucts, a maker of cases for elec­tronic de­vices.

Tain­wala said he saw the pos­si­bil­ity of smaller ac­qui­si­tions that were dis­tri­bu­tion-re­lated as his com­pany worked to in­te­grate Tumi over the next few years. “We won’t stop look­ing for ac­qui­si­tions,” he said. “Tumi will keep us busy for the next fewyears.”

Sam­sonite re­ported on Tues­day its first-half net in­come dropped 12.7 per­cent to $82.4 mil­lion from a year ear­lier, amid the un­cer­tainty of slower growth prospects, ter­ror in­ci­dents, and the im­pact ofw eaker cur­ren­cies against the dol­lar.

Sam­sonite shares rose as much as 6.5 per­cent in Hong Kong trad­ing on Tues­day. Sam­sonite’s shares have dropped 4.2 per­cent through to Mon­day after it an­nounced the Tumi ac­qui­si­tion on Mar 4.

“The mar­ket is wait­ing to see if the deal can bring real syn­ergy and be­come a new growth en­gine for Sam­sonite amid the busi­ness slow­down,” said China International Cap­i­tal Corp Ltd an­a­lyst Chris Kwai on Tues­day.

Kwai is cau­tious on whether Tumi will be able to dou­ble sales in the next few years, though growth be­low that fore­cast would be seen as pos­i­tive. “It would mean that the ac­qui­si­tion was the right de­ci­sion for Sam­sonite to im­prove its per­for­mance,” he said.

The sec­ond-half looked much more “hope­ful” and the com­pany has seen some early signs of a re­cov­ery, the CEO said. Sales are fore­cast to post mid to high-sin­gle digit growth in North Amer­ica and high sin­gle-digit growth in China in the sec­ond half, Tain­wala said.

Sam­sonite gets about 40 per­cent of its rev­enue from Asia and a third from North Amer­ica, with China mak­ing up about 10 per­cent of rev­enue.

Tumi will launch new light­weight prod­ucts cus­tom­ized for Chi­nese con­sumers at the end of next year.

REUTERS

Spe­cial­ist trader gives the share price for Tumi Hold­ings Inc at the post where the stock is traded on the floor of the New York Stock Ex­change.

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