Yesterday, a gorilla* stormed through the offices of Samsonite Corp, the “world’s top luggage maker,” and jumped up and down on their financial status. Their retail unit filed for Chapter 11 bankruptcy and will close approximately half of their 173 stores.
Samsonite Company Stores LLC said its Chapter 11 filing is aimed at focusing the business on its outlet stores, which have fared better during a steep drop in consumer spending on travel and leisure.
Under the company’s prepackaged reorganization, creditors will be paid in full and Samsonite Corp will remain the owner of the retail business. It expects to emerge in as little as 45 days.
“The recession has caused a severe decline in consumers purchasing travel-related goods and the company has responded to this critical situation with a substantial restructuring program,” said Kyle Gendreau, the treasurer of Samsonite Company Stores and chief financial officer of Samsonite Corp.
It turns out the expansion that private equity firm CVC Capital Partners (Samsonite’s owners) pushed through in 2007 was a bad idea, and the bankruptcy will allow them to break leases and close “as many as 83 stores.” The company says it will focus its business on outlet stores.