Tumi acquisition lead Samsonite to good numbers
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Samsonite Asia sales lept 16 per cent last year, a rate slower than the Hong Kong-listed company’s global growth, and predominantly driven by the acquisition of Tumi.
The world’s largest travel luggage company achieved global sales of US$3.49 billion, up 23.3 per cent, with Asia accounting for $1.19 billion of that. Samsonite Asia sales excluding the Tumi effect grew by a much more modest 4.8 per cent, while sales in Japan grew by 32 per cent, or 12 per cent excluding the Tumi business, driven by the Gregory, American Tourister and Samsonite brands.
In the first half of last year, Samsonite assumed direct control of the wholesale and retail distribution of Tumi products in South Korea, Hong Kong, Macau, China, Indonesia and Thailand. Net sales in China increased by 11.9 per cent year-on-year, (7.2 per cent excluding Tumi), due to increased sales of the Samsonite and American Tourister brands. Net sales in South Korea increased by 15.7 per cent, but fell 2.5 per cent excluding Tumi, due to fewer shoppers visiting from China and weak consumer sentiment.
Net sales in Hong Kong increased by 34 per cent year-on-year, driven by the addition of Tumi, but by just 1.5 per cent excluding Tumi.
Net sales in India increased by 4.6 per cent, despite a temporary disruption during the year due to the Indian government’s introduction of a goods and services tax that took effect in the third quarter of last year.
Strong direct-to-consumer growth
“We saw very satisfying growth last year, further driven by a strong performance from the Tumi and eBags businesses following their integration into the group,”
Samsonite showed solid progress on its move towards increasing its direct-to-consumer sales, aided by the acquisition of online luggage retailer eBags last May.
Net sales rose 57.4 per cent overall, by 32.1 per cent excluding Tumi and by 12.2 per cent after 1 further excluding eBags.
Dollar reported profit attributable to the equity holders increased by US$24.1 million, or 12.1 per cent.
“We saw very satisfying growth last year, further driven by a strong performance from the Tumi and eBags businesses following their integration into the group,” said chairman Tim Parker.
“In particular, we made solid strides in improving Tumi’s performance and as a result it was accretive to earnings in its first full year post acquisition. Now that we have strategically expanded into the highly attractive premium segment, and established a firm foothold in e-commerce, we look forward to more aggressively expanding our presence in the direct-to-consumer channel worldwide, especially direct-to-consumer e-commerce, where we see strong growth opportunities.”
CEO Ramesh Tainwala said that while the company continued to benefit from the buoyant growth in travel and tourism worldwide, its strong performance was also driven by continued investment in brands, especially in the form of increased marketing support, as well as the expansion of direct-to-consumer e-commerce and brick-and-mortar retail operations.
“Looking ahead, we will continue to implement our multi-brand, multi-category and multi-channel strategy, while leveraging our decentralised management structure and investment in marketing, in order to capitalise on the many exciting opportunities ahead of the group,” he said.
Questions & Answers
Q.What was the growth rate for Samsonite's sales in Asia when the impact of the Tumi acquisition is removed?
What was the growth rate for Samsonite's sales in Asia when the impact of the Tumi acquisition is removed?
Samsonite Asia sales grew by a modest 4.8 per cent last year, once the contribution from the Tumi acquisition was excluded. This figure is significantly lower than the overall reported growth for the region.
Q.Which specific markets saw a decline in sales when the Tumi acquisition is not considered?
Which specific markets saw a decline in sales when the Tumi acquisition is not considered?
South Korea experienced a 2.5 per cent drop in net sales when Tumi's impact was excluded. This decline was attributed to fewer Chinese shoppers and weak consumer sentiment in the region.
Q.Beyond acquisitions, what strategies did the company highlight for its future growth?
Beyond acquisitions, what strategies did the company highlight for its future growth?
The company plans to continue its multi-brand, multi-category, and multi-channel strategy. It will also use its decentralised management structure and invest in marketing to capitalise on future opportunities.
Q.How much of Samsonite's total global sales did the Asian market contribute last year?
How much of Samsonite's total global sales did the Asian market contribute last year?
Asia accounted for US$1.19 billion of Samsonite's global sales, which totalled US$3.49 billion last year. This made Asia a significant portion of the company's overall revenue.
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