Samsonite International reported robust sales in China helped fuel a 16.6 percent increase in currency-neutral sales in the six months ended June 30, indicating Chinese consumers continued to spend on travel despite a collapse of domestic stock prices and slowing exports.

The Hong Kong based maker of luggage and packs said currency-neutral sales grew 17.2 percent to $471.4 million in Asia, 17.3 percent to $402.7 million in North America, 17.4 percent to $255.0 million in Asia, and 7.3 percent to $62.9 million in Latin America. Driven by Samsonite and Samsonite Red through the e-commerce channel and strong business-to-business sales, China saw first half net sales increase by 29.8 percent 9 year-on-year.

Brand breakdown

Sales of High Sierra reached $54.4 million, up 3.0 percent from the six months ended June 30, or 5.3 percent in currency-neutral terms (c-n). High Sierra's sales in the Asia region grew 64.4 percent to $7.1 million from the previous year.

Samsonite reported sales of Gregory backpacks, reached $18.0 million, but did not disclose the percentage change saying it was not meaningful given that it has only owned the brand for  a year. Samsonite acquired Gregory Mountain Products from Black Diamond Inc. on July 23, 2014.

Net sales of the  flagship Samsonite luggage brand increased by 7.5 percent year-on-year to $736.3 million, accounting for 61.5 percent of the Group’s total US dollar Reported net sales. That compared to 67.3 percent for the same period in 2014. The American Tourister brand recorded net sales of  $263.8 million, an increase of 18.4 percent 6 from the same period in 2015, with the growth largely driven by Europe and Asia.

CEO Ramesh Tainwala said Samsonite’s investment in the High Sierra and Hartmann brands, which it acquired in the second half of 2012, is beginning to show its return, with net sales having increased by 5.3 percent and 9.7 percent, respectively, on a constant currency basis.

“The brands we have acquired are beginning to gain traction as we fine tune their product, marketing and channel strategies to expand and compete outside their home markets,” said Tainwala. “We also see good potential in the non-travel product categories, especially the large but highly fragmented backpack and casual bag segment where our market share is currently very small. We believe our strategy of deploying multiple brands in this category will provide us with the building blocks for sustained long-term growth.”

Category breakdown

In terms of categories, sales of Travel products, which include  conventional luggage, grew 9.5 percent, while sales of Casual Product, grew 21.7 percent primarily as a result of the success of the High Sierra brand and the Samsonite Red sub-brand as well as the contribution from Gregory. Sales of Business Product increased 44.4 percent due primarily to sales of tablet and laptop cases.

Outlook

Samsonite aims to deliver top-line growth, maintain gross margins, increase Adjusted EBITDA margins and enhance shareholder value in the second half as it continues to integrate Speck, Gregory and Lipault. It anticipates further synergies in sourcing, systems and back-office support functions; further improvements in the efficiency and effectiveness of the Group’s supply chain and global distribution network; and continuing to  evaluate acquisition opportunities.