US luggage maker Samsonite International SA yesterday said it may acquire up to US$1 billion in Chinese and Asian brands in the next two to three years to diversify its product range.
The announcement came after Samsonite said in a statement that it saw a 17 percent year-on-year net profit increase in the first half brought on by a successful “diversification in terms of brands, products and markets.”
The Hong Kong-listed company expects China to become its biggest market in as little as three years, overtaking the US, company chairman Tim Parker told Dow Jones Newswires.
“In the past we’ve looked at brands that we could sort of internationalize. Now I think the time for us ... is to look at local brands too,” Parker said, referring to China.
“The Chinese market now has a number of brands that are quite well established,” Parker said, adding that competition in the high-end luggage sector remains intense.
“There is an enormous swathe of our market ... [with] some actually rather good brands that have established themselves locally,” he said.
Samsonite saw net sales increase to a record US$983.6 million — 37.6 percent of its global sales for the first six months of the year came from Asia. It said that 9.5 percent of the sales were in China.
The company said it will raise prices in Japan and India again this year as weakening local currencies cut the dollar value of sales from the countries.
The luggage maker will raise prices in Japan by 10 percent starting next month and soon increase prices in India by 7 percent, Asia-Pacific and Middle East president Ramesh Tainwala said at an earnings press conference in Hong Kong.
The price revisions at the Mansfield, Massachusetts-based company follow an 8 percent increase in India earlier this year and a previous 10 percent raise in Japan.
This year “has been a much calmer year on the currency front, and this has caused fewer distortions to our sales and profits,” Parker said in a filing to the stock exchange yesterday.
“There remain a few exceptions, in particular the Japanese yen and the Indian rupee, both of which have declined considerably,” he said.
Japan made up 3 percent to 4 percent of group sales and India accounted for 6 percent, according to William Yue, director of investor relations.