Samsonite Files For Bankruptcy
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.
*Fun fact! The old "Samsonite gorilla" TV ad was actually for American Tourister, which Samsonite only acquired after the spot aired. Most people now equate Samsonite with the ad, however. Weird.
"Samsonite retail unit files for bankruptcy" [Reuters]
(Photo: madaise)
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Now my future kids won't get the reference in Dumb and Dumber.
What a sad day.
I can step into Chinatown and get the same caliber, semi-durable bag for about 1/4 of the Samsonite price (and Samsonite bags are made in China too, like everything else).
In my frequent traveler history, I've gone through multiple sets of Samsonite & non-Samsonite bags over the years. Samsonite bags are no better than the cheapos. Which is a bummer.
The only bags worth $$$ are Tumi bags. I bought one as a present for the S.O. years ago and it's held up extremely well, surprisingly.
Man, I had the best American Tourister bag. I bought it in the early '90s. It met its fateful end not with a gorilla, but in the baggage claim at Pittsburgh's airport.
Samsonite CFO: The 800lb gorilla in the room is that our finances suck.
Oh no, you mean overpriced bags are experiencing a slowdown in sales? What a sad day!
Wait...
Why does a luggage company need dedicated retail outlets? Shouldn't the focus be on the luggage business, closing the stores and taking advantage of places that you know, sell luggage and OTHER THINGS to sell it?
When I buy bags, luggage, etc. I know I sure as hell don't say "Gee, I wonder if there's a store that sells nothing but luggage."
I look for a retailer that has all the things I need, and more than one brand of luggage for me to look at.
@rit: You see, I'd agree with you but I would think the same rule would apply to greeting cards and candles. Hallmark and Yankee Candle continue to baffle me.
Harry: What's her last name? I'll look it up.
Lloyd: You know, I don't really recall. Starts with an S! Let's see. Swim? Swammi? Slippy? Slappy? Swenson? Swanson?
Harry: Maybe it's on the briefcase.
Lloyd: Oh, yeah! It's right here.
Lloyd: Samsonite! I was way off! I knew it started with an S, though.
you want indestructible, you get a Pelican case. It is the best piece of road warrior luggage.
@robotprom: Except it looks like shit. Indestuctable and good looking road warrior kit requires Rimowa or Zero Halliburton.
I actually have an American Tourister laptop bag. Plenty of pockets.
@Blackfished: I was just going to find that and copy-paste that in lieu of an original comment from myself...damn youuuuu...
So sad. All those gorillas, out of work. And they don't have any real-world skills. What can 40 years of beating up luggage prepare you for? It's not like any of them can use computers.
@Coles_Law: Then you, my friend, need to pay a visit to the Yankee Candle flagship store just "up the road a stretch" from me. A real tourist hotspot around here.
It's a wonderland of nightmares scented like melon and in 4 brazillllon colors.
@Coles_Law: Hallmark stores don't JUST sell greeting cards, though. They sell other gift-related items.
Don't know why the rule doesn't apply to Yankee Candle, though. Perceived value? Dunno. i grew up in a house where Yankee Candles were considered to be the only ones worth anything, my mom wouldn't even LOOK at any other brand, so the Yankee Candle store in the mall was the only one she actually enjoyed setting foot in.
@Nicole: I'll grant you the Hallmark thing, although it still seems like a niche market. I've got no beef with Yankee Candle either. I'm just baffled that a place that only sells candles can stay in business, especially when their stores smell like someone detonated an M-80 in a flower garden.
What do you want me to say? They were charging super expensive prices. With the recession going on, I now try to find things used off Craigslist and don't even buy new anymore. I found a JanSport rolling backpack that retailed for $80 only for $30 off Craigslist that was only used for a month!
I've been buying Dell Outlet laptops and they're practically brand new. I'm saving money wherever I can. If Samsonite can't cut it, then too bad so sad.
@badhatharry: American Tourister gorilla trivia:
The original luggage-trashing gorilla in the TV ads was played by actor Don McLeod (also the gorilla in the movie "Trading Places"):
When the ad campaign was resurrected several years later, the ape was played by Boston standup comedian Tony V, appearing mostly on the TV talk show tour and making personal appearances to promote the luggage:
@scoosdad: Please don't tell me how they make the sausages. Now I'm concerned that Don McLeod and Tony V have no marketable skills.
@MalcoveMagnesia: Tumis are excellent bags. Mine came from a Tumi outlet, and it has held up. My parents have a complete set they purchased in the early 90s that still looks great after God knows how much abuse.
I also happen to like my Victorinox Swiss Army brand rolling suitcase which I purchased at some department store or other on sale plus coupons for a steal. I haven't had good luck with Samsonite - the zippers seem to die fairly early.
I came here to post this!
As thanks, please take my extra gloves, my hands are starting to sweat.
@scoobydoo: Yeah, but who cares if it looks like crap..just slap "Property of US Government" and "radioactive samples" stickers all over the outside, and nobody will mess with your stuff.
There are two things that have always seemed abnormally expensive to me...luggage and mattresses. Why does a mattress cost $1300 and why does a luggage set cost $300?
Thankfully, nobody has ever tried to combine the two. A rolling mattress with a handle would probably cost at least $5000.
@s25843:
Because some "outlet" malls - most notably those owned by Mills/ Simon - are designed in such a way they never expect a consumer to travel the entire mall. Instead, those malls are at least two miles in circumference and there are premiums for merchants to occupy high traffic areas. For merchants who can't - or won't - pay that stipend, they may simply do what they can with the traffic, or thay can take advantage of the fact the malls can't fill all the spaces available and lease for pennies on the dollar. It's a very incestuous arrangement most of the time, but it's wrong to pick on the retailer for doing whatever it can to survive.
We looked at some Samsonite bags at JcPenney. They were really ugly and looked cheaper in quality than any of the other luggage they had. They were also at least 4x the price of any other luggage in the store.
No wonder they are in financial trouble.
The Swiss Gear bag we picked up at Target was hands down a much better bag.
@Nicole: I had a teacher in the 8th grade that would burn Christmas Cookie Yankee candles for when we were doing tests and such and it just had the most amazing smell that for Christmas that year she ended up with like 150 of them from all of us students. I bet she got pretty sick of it. Now when I'm feeling a little nostalgic I'll burn one.
I have my Grandma's Samsonite suitcase from the 1940's. I have used it as a seat or a step stool on several occasions. It weighs about 20 pounds all by itself, though.
Mom's suitcase just gave out so I am going to let her use it. I need a suitcase I can actually get some clothes into before I exceed the airline's weight limit.
I'm going back to college this fall and after searching and searching for a good, useful, durable backpack, I came away with a Swiss Gear. I love my North Face hiking pack, but I could not square the price with the lack of functionality for a book bag. I got my brand new Ibex off ebay for 2/3 of the new price and free shipping because somebody didn't go to Staples and make sure their laptop fit.
It sounds like it's the stores division filing for bankruptcy, not the whole company
@s25843: Same reason some malls have two or three Starbucks or Radio Shacks or other stores: if you go to a mall looking for luggage, and there are two or three Samsonite stores, that nearly guarantees that if you buy luggage they'll be the ones who sell it to you. It also allows consolidation of back room stuff too: the stores could theoretically share storage or management space.
I know of at least one intersection in my area where all four corner gas stations are Shell. If someone stops at that corner to get gas, Shell wins no matter which one the driver chooses.
@Nicole: They have a cult following with middle aged and gray haired housewives. Sort of like those little ceramic houses. That is the only reason Yankee Candle continues to exist. I can't stand the smell of the store, all the chemical faux smells makes me gag.
@vorpal_hamster: I almost bought a set of vintage leather luggage. Then I realized at some point it would be in the hands of the airlines and decided against it.
Samosonite's issue wasn't expansion so much as it was cost and declining quality. I quit buying Samsonite luggage several years ago when the cheap stuff fared as well with the airlines as any Samsonite bag I had purchased.
It seems to me that they got caught in the middle. With the top end brands (Tumi, Briggs and Riley, etc.) you're buying a high-quality, durable piece of luggage and (more importantly) a guarantee and great customer service. Bag breaks, they'll fix or replace, no hassles.
On the low end, you're buying a cheap bag with no guarantee, but you don't care because you don't travel that much and it's cheaper to replace it several times than it is to buy a Tumi.
Samsonite was more expensive than the bottom end bags, but didn't offer the customer service of the high end bags.
Perhaps someone needs to do a study, but how many companies are going under after being bought out by private equity firms. The Chicago Tribune was bought out by one and promptly went under. Samsonite too.
@aswearengen: I believe you can add KB Toys to that list... they had something like 35 years of increasing profits until Consolidated Stores (the people who owned Big Lots) sold them off to Bane Capital Management... three years later, they filed for their first bankruptcy...
@bohemian:
Just picked up 3 pieces of Swiss Gear for 75% off at a Target clearance. Guess what some buds are getting for Christmas ?
Folks still have their Samsonite luggage they bought back in the '70s. Hard polycarbonate shells, just about as indestructible as they come.
@Stanwell: You can add about 100 companies to that list. But in many cases the deals done by private equity were never really structure for the retailers to succeed. Instead the equity firms bought the company with borrowed money. Then once they owned the companies they used the company equity to pay off the debt and paid themselves enormous "fees" and salaries. So now the equity firms themselves no longer carried the debt and had already made millions and millions of dollars. Since the companies (e.g. Samsonite) carry the debt, it can now file bankruptcy with no harm to the owners. The people that get the shaft are the lease holders, creditors, employees, and even the customers.
Sad. I *did* go to Samsonite 2 years ago when I was looking at proper luggage for study abroad. I needed something durable and something that didn't tip over as my el-cheapo set did so that I could get it on and off the tube in London for frequent trips. Samsonite, however, did not have anything too inovative and things were either awkward for my little frame to move around or were just too darn expensive.
I went up to Filene's Basement in Chicago (near where I live) and they have a million Samsonites, a million things of luggage, and I bought a High Sierra set which was VERY light, looked durable, and was about $300.00 INCLUDING 15% tax.
My parents bought lugguage there, too, to come visit me. Dad insisted on a Samsonite. The thing looks like crap after ONE trip.
Mine still looks BRAND NEW after 10+ trips around EUROPE.
Well, perhaps the marketplace basically agrees with you. I mean, not to put too fine a point on it, but they /are/ filing for bankruptcy and closing half of them.
@scoosdad:
I've always preferred George Barrows as a gorilla.
He was in Robot Monster & the Beverly Hillbillies
Way cheesier!
@MalcoveMagnesia: I have a Tumi brief case that's has held up extremely well over the last 7 years. I use Briggs & Reilly luggage, lifetime guarantee. Been using them for over 10 years, never had anything break, unlike previous Samsonite bags.
In some outlet malls Samsonite has 2 or 3 stores (Sawgrass Mills in FL comes to mind) How can this be efficient??