Hong Kong company reporting season

Samsonite sales jump 31pc in the first half after acquisition of high-end brand Tumi

PUBLISHED : Friday, 25 August, 2017, 12:57am
UPDATED : Friday, 25 August, 2017, 2:58am

The world’s largest luggage-maker Samsonite reported a 1.2 per cent year-on year growth in first-half earnings although its sales rose 31 per cent, a result largely attributed to the acquisition of high-end brand Tumi.

Samsonite reported on Thursday that the company net profit in the first half of 2017 was US$83.4 million, a 1.2 per cent growth compared with $82.4 million in the same period of last year.

The company’s net sales for the past six months to June amounted to US$1,586.1 million, and the Tumi brand contributed US$296.9 million of sales. The main brand Samsonite stayed in the top-selling spot with a US$777.7 million sales recorded for the first half, which accounted for less than half of the group’s total net sales compared to 60.8 per cent of total net sales for the same period in 2016.

“All of our regions delivered strong constant currency net sales growth in the first half of 2017, despite challenging trading conditions in some of our key markets,” said Ramesh Tainwala, chief executive of Samsonite.

North America is the best-performing region for Samsonite, benefiting from the steady growth in travel and tourism. The company achieved net sales of US$617.2 million for the six months ended June in this region, an increase of 53 per cent from last year.

The acquisition of the Tumi business had a significant positive impact on the performance in Asia particularly.

In the first half of 2017, Samsonite assumed direct control of the distribution of the Tumi brand in South Korea, Hong Kong, Macau, China, Indonesia and Thailand. The company’s net sales in Asia reached US$563.3 million for the past six months, an increase of 19.8 per cent compared to the same period the previous year. Excluding Tumi, net sales in Asia would only increase by 3.8 per cent.

Samsonite is now aiming to expand its e-commerce business by acquiring eBags, a popular North American online retailers of bags and related accessories for travel. It paid US$105 million for this acquisition this May.

The luggage maker has seen strong growth in its direct-to-consumer business, with net sales up 89.0 per cent year on year. This increase was driven by a 126.7 per cent increase in direct-to-consumer e-commerce net sales, partly as a result of the acquisition of eBags.

“Looking back over the past six months, we have made significant strides in integrating Tumi into the Group, and with the addition of the eBags business, we have further strengthened our foothold in the digital space,” said Samsonite chairman Tim Parker.

The Hong Kong-listed company saw a 5.12 per cent growth in its share price to HK$31.85 after the result announcement on Thursday.