Samsonite poised for US$1b in takeovers

Luggage maker Samsonite International could spend up to US$1 billion on acquisitions in the next two or three years as it seeks to diversify its product base, but ruled out a deal in the luxury end of the market.

"We have a strong balance sheet, a capacity [to do deals] up to probably a billion dollars. We think there are some fantastic opportunities out there," chief executive Tim Parker told a news conference yesterday.

"We're still not in the handbag market. We have a small share of outdoor segment, not in the lower end of the luggage market, still a small player in the business category and have a lot to go in the casual products category."

News of the spending plan came as the world's largest travel luggage company announced interim profits of US$94.7 million, up 16.9 per cent on the first half of last year after an adjustment for a one-off deferred tax credit last year. The consensus forecast compiled by Bloomberg was for profit of US$90.33 million.

Excluding foreign currency effects, net sales year on year were up 16.5 per cent to US$983.6 million for the first half. American Tourister, the firm's entry-level brand, drove a significant portion of sales growth, surging 25.7 per cent, while Samsonite delivered 5.5 per cent.

The company said it would raise prices in India and Japan to compensate for weak local currencies.