Samsonite brushes off short-seller attack in just 2 months
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

Samsonite brushes off short-seller attack in just 2 months

Luggage titan Samsonite was subjected to a short-seller attack two months ago that wiped a billion dollars off its market cap and initiated a change of CEOs. However sixty days later, the company says this attack has had no impact on its underlying business. With a new CEO in place, and a share price that’s regaining momentum, Samsonite says its had a strong first half of the year, and expansion is on the cards.

In the last 30 days, Samsonite’s share price has appreciated by 13%

graph 3107 samsonite

Subrata Dutta, Samsonite’s president of the Asia Pacific region, said: “The short seller attack hasn’t impacted our business at all. We haven’t lost any market share as we kept focusing on innovations and keeping our customers delighted, that is what matters to us.”

Asia is responsible for a third of Samsonite’s overall revenue, and the group has targeted it as a high-growth region. Dutta said that Samsonite had a “good first half” and expects to deliver “double-digit growth” in the second half. Hence, an Asian expansion is on the cards. In the same interview, he explained:

“We are eyeing 22 to 25 new stores in the Asia-Pacific region for Samsonite in the second half of the year to cash in on the growing demand for travellers’ goods there.”

Samsonite managed to de-fang the short seller (Blue Orca)’s attack in two ways: first, the company reiterated its strong financials and solid underlying business. And second, when it looked like former CEO Ramesh Tainwala had falsified his educational background, they replaced him almost instantly. As a result, investors still have significant faith in the Samsonite story.

Terry Hong Xueyu, a Guotai Junan Securities analyst, seems to speak for the consensus when he says: “I still have a pretty positive view on Samsonite, and I think it should be able to recover all the lost ground pretty quickly.” He rates Samsonite a “buy”.

Disclosure

Dominion holds Samsonite in its Global Trends Luxury Fund.


If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

Disclaimer
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.