Samsonite profits jump 30% as it warns of damaging trade war

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Samsonite has warned that the ongoing trade war between the US and China is beginning to affect its sales despite a strong six months.

For the first half of 2018, the luggage retailer reported a year-on-year net sales rise of 13 per cent to $1.85 million (£1.4 million), while profits jumped 28.8 per cent to $24 million (£18.4 million).

This was aided by a standout performance at the bag brand Tumi, which Samsonite acquired in 2016 for $1.8 billion (£1.38 billion), seeing sales grow 39.4 per cent.

Although sales in its key Asia market were up 14.4 per cent, accounting for around a third of its overall business, it cautioned investors that the burgeoning trade war between China and the US was beginning to affect consumer confidence in the region.

“We had a very strong first half (in China) and what we are trying to do is set some expectations that because of trade wars and the macro-noises around the place there are little pockets of noise you might see,” its newly appointed chief executive Kyle Gendreau said.

“If I took a temperature check, I think it starts to feed into the minds of consumer sentiment, which isn’t as easy to put a pin on… But I do think there is enough noise around this that impacts how people think.”

Shares jumped five per cent following the results despite the warnings, but are still yet to recover after being battered earlier this year following a damning report by a short seller who accused the company of “massaging earnings”.

In June, Samsonite’s chief executive Ramesh Tainwala quit his role as the company’s share prices dived 15 per cent, leaving the then chief financial officer Gendreau to fill his boots.

In response to the accusations, Samsonite’s chairman Timothy Parker said the report “contained the opinions of a short seller whose interests may not be aligned with those of shareholders in general, and that it may be intended specifically to undermine confidence in the company and its management, and to harm its reputation”.

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