Samsonite International has built a business on being wheeled around and tossed about. As the world's #1 travel luggage maker, Samsonite designs, manufactures, and sells luggage, outdoor and casual bags, business and computer bags, and travel accessories such as passport wallets, neck pillows, and luggage tags. Besides its core Samsonite brand, the company makes and markets the entry-level American Tourister brand. It's also extending its reach into casual bags. The luggage maker sells its products through wholesale and retail channels in more than 100 countries. With joint headquarters in the US and Luxembourg, Samsonite began trading on the Hong Kong Stock Exchange in mid-2011.
Samsonite's initial public offering raised HK$9.7 billion ($1.25 billion), down from an expected HK$11.7 billion ($1.5 billion). The completion of its IPO allowed its two main shareholders, private equity firm CVC Capital and the Royal Bank of Scotland, to sell down their stakes after leading the once-ailing business through the economic downturn. Most of the proceeds from the IPO were used to repay debt. Like other global consumer products companies that list in Hong Kong -- Italy's PRADA and France's L'Occitane to name a few -- Samsonite made the conscious decision to list in China rather than in the US. China is the #2 luxury goods market in the world after Japan, and there is rising interest in travel among people in Southeast Asia.
In its first year as a Hong Kong listed company, Samsonite saw record net sales of some $1.5 billion in fiscal 2011, a 34% increase over 2010, due to strong performance across all of its markets and product categories. Geographically, all four regions in which the company operates -- Asia, Europe, North America, and Latin America -- achieved double-digit net sales growth. Global travel continued to grow in 2011, especially in Asia, which is Samsonite's most profitable market due to an emerging middle class and rising levels of disposable income. The company's financial performance for the year also reflects its effort over the past two years to revamp its product lines according to local consumer tastes in each region. At the end of 2010 Samsonite ended licensing agreements with Lacoste and travel gear company Timberland. In 2011 Lacoste and Timberland products accounted for only 0.3% of total net sales, compared to 4.4% in 2010.
As part of its business strategy, Samsonite continues to expand its points of sale for its Samsonite and American Tourister brands, adding 2,900 during 2011 to bring its total to more than 40,000 points of sale worldwide. Through 2012 it plans to add new retail points of sale in high-growth markets like China and India. It also seeks to broaden its wholesale network.
Samsonite is working to expand its portfolio of products to increase its presence in the $4 billion casual bag market in North America, a region where casual bags greatly outnumber luggage pieces. In mid-2012 Samsonite agreed to acquire High Sierra Sport Company, a US-based maker and distributor of casual bags and luggage for adventure travelers. As part of the $110 million purchase, Samsonite plans to expand distribution for the High Sierra brand in Asia, Europe, and Latin America. Samsonite's also banking on the opportunity to develop brand extensions for High Sierra, get its foot in the door with sporting goods retailers, and roll out retail shops in North American under the High Sierra banner.
Samsonite has distribution joint ventures with Turkey's Desa and the Philippines-based Rustan Group's Specialty Investments. It also holds controlling stakes in Samsonite (Thailand), Samsonite Australia PTY Limited, and in Chile's Saxoline, all travel goods distributors.