Covid’s ongoing impact on global travel continues to impact travel-retail brand Samsonite which has recorded a loss attributable to shareholders of US$142.5 million for the first half year.
However, the loss is a sharp improvement against the same period a year ago when the company posted a $974 million deficit.
In a results filing with the Hong Kong stock exchange, Samsonite said widespread cross-border travel restrictions, the closure of retail stores and ongoing, significant reductions in travel and discretionary spending among consumers had reduced demand for many of the group’s products.
Net sales were $799.5 million for the half year, little different to the $802.3 million of the same period a year earlier, but down 54.5 per cent on the same period in 2019, prior to the outbreak of Covid-19.
While overall sales were down marginally, Asia recorded a 3.8-per-cent improvement and North America was up 0.7 per cent. However, turnover in Europe slumped 21.3 per cent and in Latin America by 11.1 per cent.
The group slashed marketing costs from $44.5 million to $28.7 million and continued to pare back administration costs and other overheads to right-size its business for what it anticipates will be a slow recovery from the Covid pandemic.
Samsonite said net sales were continuing to improve entering the third quarter with July ahead of July last year by 93.9 per cent – but still down 40 per cent on July 2019.
“However, given the continued uncertainties around Covid-19 and the varying rates of vaccine rollout around the world, we expect the road to recovery to remain bumpy,” said chairman Timothy Parker. “As such, we continue to carefully manage all aspects of our business, including stringent controls on expenses, working capital and capital expenditures for the remainder of 2021.”
Meanwhile, the company set up a brand development and sourcing hub in Singapore in June as part of a global initiative to enhance the alignment of the company’s product development, brand management and supply chain operations across Asia.
“Our Asia regional leadership is in the process of relocating to Singapore to support the hub and manage Samsonite’s continued business growth in Asia,” said Parker.
And last month, Samsonite sold its Speck business for $36 million. Speck made protective cases for electronic devices including laptops and smartphones.
“These two actions build on the comprehensive restructuring program we undertook last year, further improving Samsonite’s competitive position as we focus on long-term sales growth, margin expansion and shareholder value creation as travel continues to recover around the world,” concluded Parker.