Samsonite bags luxury luggage rival Tumi
Print Edition
LUGGAGE giant Samsonite said yesterday that it would buy US luxury bag maker Tumi in a deal worth US$1.8 billion that analysts said would give the firm a foothold in the lucrative Chinese high-end market.
In a statement to the Hong Kong exchange, where it listed five years ago, Samsonite said it would pay US$26.75 a share for the firm — a third more than its value on Wednesday before the likely buyout was sounded.
Samsonite, which saw its shares edge up 1.27 percent to HK$24 (US$3.09) at the close following the announcement, said Tumi was a “perfect strategic fit” for its business.
“This is a transformational acquisition for Samsonite. It will meaningfully expand our presence in the highly attractive premium segment of the global business bags,” Samsonite Chief Executive Officer Ramesh Tainwala said in a separate statement.
Financial analyst Jackson Wong at brokerage firm Simsen Financial group said the purchase was a “good move.”
“Tumi is a premium brand name ... higher-end names would enhance their brand image,” said Wong, associate director of Simsen.
“Chinese people love to buy Samsonite. However in the last few years, they have been buying extremely luxurious suitcases, and that’s why they are trying to go upscale.”
Numerous Western brands in recent years have been setting up shop in China, which is widely considered the world’s biggest luxury market, as a burgeoning middle class drives a shopping frenzy.
France’s Hermes — known for its luxury handbags — opened a four-story flagship store in Shanghai in 2014.
US-based Samsonite raised US$1.25 billion in an initial public offering in Hong Kong in June 2011, one of several Western brands — including Prada and Esprit — seeking to use the city to boost their presence in fast growing Asian markets, particularly China.
But the world’s second-largest economy expanded 6.9 percent in 2015, the worst performance in a quarter century and a far cry from the years of double-digit increases.
The country’s luxury market also took a hit from a years-long corruption crackdown.
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