Samsonite planning 10% price hike in reaction to trade war tariffs
Global luggage market leader Samsonite is planning to hike prices by 10% in reaction to the latest trade tariffs imposed by U.S. president Donald Trump. Wholesale buyers were warned about the potential increase over a month ago, when Samsonite’s North American president Lynne Berard sent a letter to stores all across the country. She says that the tariffs will hit “more than” $3 billion in luggage and travel bags that are imported into the U.S. from China. Samsonite makes about two thirds of its products in China.
Samsonite’s share price has edged up over the last five days, despite trade woes
SOURCE: Yahoo Finance
President Trump signalled this latest instalment of tariffs the Monday before last. He said his administration was planning to apply a 10% tariff on roughly $200 billion of Chinese goods coming into America, and that figure will become 25% next year. This round will be particularly felt by U.S. consumers, given that (unlike previous tariffs) it includes a number of products that Americans buy directly. Samsonite doesn’t like it. The stores that stock their products don’t like it. And they are not alone.
Jon Gold, vice president of supply chains and customs policy for the National Retail Federation, commented prior to the announcement of the latest tariffs: “We just don’t think tariffs are the right approach. There certainly is concern going forward on the impact of the tariffs: The tariffs are paid by U.S. companies and then they’re passed onto the consumer.”
Samsonite’s position in the market offers it protection from the worst of the tariffs’ impact. As one wholesale buyer told Bloomberg: “It’s not good. Samsonite is a worldwide brand, so we definitely have to have it. It’s the most popular.” The company has also been moving to diversify production away from China in recent months, for unrelated reasons.
For his part, the company’s CEO, Kyle Francis Gendreau, is being forthright about his estimation of the situation, saying: “the whole thing is crazy, right?” Hopefully, the president is listening.
Dominion holds Samsonite in its Global Trends Managed Fund.
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