Samsonite Asia reports ‘continuing softness’ in Hong Kong
Continuing softness in Hong Kong, Macau and Korea sedated Samsonite’s first quarter sales, the company has reported.
While global sales were up a whopping 29.3 per cent to US$733.5 million, those gains were largely delivered by the addition of the Tumi business last year. Excluding Tumi, the Hong Kong-listed company’s global comparable sales rose by a more modest, but still respectable, 5.7 per cent. Operating profit increased by 21.8 per cent to $72.8 million, with gross profit margin up from 52.5 per cent to 55.3 per cent, again partly impacted by the higher margin of luxury brand Tumi.
Samsonite Asia sales rose by 18 per cent, or by 4.3 per cent excluding Tumi.
Hong Kong and Macau witnessed a net sales increase of 71.7 per cent year-on-year, buoyed by the Tumi business (which included sales to Tumi distributors in other Asian countries). Excluding Tumi, Hong Kong and Macau sales declined 5.1 per cent, due to fewer Chinese shoppers visiting from the Mainland.
CEO Ramesh Tainwala said Samsonite achieved double-digit constant-currency net sales growth across all of its regions in the quarter to March 31.
Samsonite Asia sales were driven by the core Samsonite brand (up 6 per cent) and Kamiliant (up 162.1 per cent). Other brands, including Hartmann (up 49.3 per cent), Lipault (up 41.5 per cent) and Gregory (up 73.5 per cent), also achieved strong net sales growth.
“The increase was partially offset by lower net sales of the American Tourister and High Sierra brands,” said Samsonite in its earnings statement.
“The American Tourister brand saw net sales decrease by 5 per cent year-on-year during the first quarter, as a result of continued weakness in the TV home shopping channel in China and South Korea. Nevertheless, the brand’s performance in Asia has begun to show early signs of improvement compared to the second half of 2016, when net sales declined by 10.3 per cent, helped by positive initial customer response to new product launches. The High Sierra brand saw net sales decrease by 37 per cent, largely due to the group’s decision to market backpacks using its other brand names in India.”
China posted a net sales increase of 10.4 per cent year-on-year, driven by Samsonite. India and Australia saw net sales increase by 9 per cent and 9.2 per cent, respectively.
Net sales in Japan grew a considerable 54.4 per cent during the quarter, and by 15.2 per cent excluding the Tumi business. Samsonite and Gregory drove the growth.
And net sales in South Korea increased 18.3 per cent, as the group took over distribution of the Tumi brand in South Korea with effect from January 1. Excluding net sales attributable to the Tumi business, net sales in South Korea decreased by 0.6 per cent, a creditable performance despite weak consumer sentiment in the country and a decrease in shoppers visiting from China.