Samsonite's profits rally in 2013, but China sales dentedWednesday 19 March 2014 07.37
US luggage maker Samsonite said today that its net profits leapt 18.6% in 2013, but despite strong worldwide sales its expansion in China was hit by an official crackdown on corruption.
The firm said annual profits reached $176.1m from $148.4m in 2012, with net sales hitting a record $2.04 billion, up 15% from the previous year.
However, China sales only grew 5.3% after years of "stellar" growth, in part due to the official crackdown on corruption, group chairman Timothy Charles Parker said.
"Clearly the slackening in the overall growth rate and official policy on gift-related purchases have had an impact on demand," he said in a statement.
Since taking over as head of the Communist party last year, President Xi Jinping has imposed an austerity drive on party and military officials as a means of reigning in graft which has aroused public anger.
The leadership has issued a raft of bans ranging from fancy banquets to expensive gifts, affecting businesses that sell luxury goods from exotic foods to jewellery.
Asia, where sales in most markets grew by double digits for the reported period, is Samsonite's most important region in terms of revenue.
"There is no sign of any let up in the global appetite for travel and tourism, especially in developing markets," Parker said.
Samsonite operates the luggage brands of American Tourister, High Sierra and Hartmann.
It raised over $225m an initial public offering in Hong Kong in June 2011. Last year it said it may acquire up to $1 billion worth of Chinese and Asian brands in the next two to three years to diversify its product range.
By listing in Hong Kong, the luggage maker joined a slew of Western brands seeking to use the southern Chinese city to boost their presence in fast-growing Asian markets.