Samsonite Traveling to Hong Kong for IPO
Famous luggage maker Samsonite announced this week that it may raise up to $1.5 billion from a share sale in Hong Kong. With a sales boost to $1.21 billion in 2010, Samsonite said it would sell about 48 per cent of the company, about 671 million shares, at a price ranging between HK$13.50 and $17.50. The stock is scheduled to begin trading in Hong Kong on June 16.
Samsonite is looking to capitalise on the high-growth Asian markets where more and more people are traveling. In a video conference this week, Samsonite CEO Tim Parker told the media that Hong Kong is the “logical choice” in order to “orient the company to where the center of gravity will be in the future.”
A recent company restructuring has boosted Samsonite’s profit margins and advertising spending, particularly in Asia where its business grew 45 per cent to $405 million last year. Samsonite will continue to invest in marketing and expanding its distribution network, highly targeting local needs and taste. China alone takes up 9 per cent of its $100 million marketing budget.
European private equity firm CVC acquired Samsonite in 2007 for $2 billion, who said at the time that China and India were key to the firm’s growth. Tim Parker confirmed this, and said those countries are Samsonite’s second and third biggest markets after the US.
Apart from suitcases, Samsonite is looking to expand its product portfolio to include business and casual bags, which account for only one-fifth of its business. Tim Parker admitted that the company has been “slow, really, to penetrate the business bags and casual bags market.”