Tumi powers Samsonite Asia growth
High-performing travel lifestyle Tumi drove Samsonite Asia sales in the first half of this year, compensating for an unusual decline in the core Samsonite brand’s business regionally.
For the six months to June 30, net sales of the Tumi brand increased by 11.9 per cent in Asia, as the brand continued to make inroads in key markets across the region. Net sales of the Samsonite brand decreased by 1.3 per cent year-on-year, primarily due to challenging trading conditions in China and South Korea, while net sales of the American Tourister brand fell by 3 per cent.
Samsonite Asia achieved a 4.8 per cent net sales gain in Japan and 9.2 per cent in India. The group continued to experience challenging market conditions in South Korea, where net sales decreased by 8.7 per cent. Excluding net sales in South Korea and B2B sales in China, Samsonite Asia recorded a net sales increase of 4.6 per cent during the first half.
Globally, Samsonite had a tough half, impacted by increased tariffs on products imported from China and sold in the US and lower tourist traffic. First-half adjusted net income fell 12.8 per cent year on year to $97 million on sales of $1.756 billion, down 5 per cent.
CEO Kyle Gendreau said the company’s fortunes improved in the second quarter with most markets showing signs of stability.
In China, wholesale turnover reduced as the group continued to pursue a direct-to-consumer business model through its own stores and online. Net sales in China increased by 5.1 per cent year-on-year, (and by 11.2 per cent excluding B2B) in the second quarter, compared to an 8.3-per-cent decline in the first quarter.
Gendreau said the global outlook remains uncertain entering the second half of the year, with US-China trade tensions rising, Brexit still unresolved, economic growth slowing in parts of the EU, the recent events in Hong Kong, and a general increase in political volatility and economic uncertainty impacting consumer sentiment worldwide.
“Considering these ongoing challenges, we will continue to invest in the business to position ourselves for long-term growth while maintaining our focus on controlling costs, managing working capital, generating cash and strengthening the balance sheet.
“We will continue to diversify our sourcing base and to renegotiate pricing with vendors to address the recent US tariff increases. In addition, we intend to temporarily reduce advertising spend for the second half of the year to help offset the pressure on our profitability caused by current headwinds.”
The advertising scale back will spare the fast-growing Tumi brand and direct-to-consumer e-commerce initiatives.