SAMSONITE
Under attack from activist investor Blue Orca / CEO quits after false doctorate claims
Leading luggage manufacturer Samsonite (Luxembourg; www.samsonite.com) has responded to allegations of accounting malpractices by activist investment fund Blue Orca Capital (Austin, Texas / USA; www.blueorcacapital.com), stating they are “one-sided and misleading.”
Blue Orca made the accusations in a short seller report on 24 May 2018, in which it said the owner of brands such as “Tumi” and “American Tourister” had “concealed slowing growth through debt-fuelled acquisitions and had massaged earnings and inflated margins through highly questionable purchase price accounting.”
However, Samsonite issued a statement on 1 June, saying, “The conclusions drawn in the report about the company and its financial results are incorrect. The company's financial disclosures are an accurate reflection of the strong core fundamentals of the business.”
Samsonite, which specialises in lightweight but ultra-strong luggage made from PP fibres, said its financial reporting systems conform to International Financial Reporting Standards (IFRS) and other applicable laws. It stood behind its track record of transparency and corporate governance.
Describing Samsonite as a “mid-level brand masquerading as a premium luxury player,” Blue Orca has called on the luggage group’s board of directors to appoint an independent audit firm to scrutinise all transactions involving its south Asian joint venture, treatment of inventory, purchase price accounting and connections between the company and its CEO. “Ultimately, we believe that Samsonite is simply carrying too much baggage to trade at such a high premium,” the investor said.
In other news, Samsonite’s CEO Ramesh Tainwala subsequently quit his role on 1 June following allegations by Blue Orca that he had falsely claimed to have a doctorate in business administration. Although Tainwala cited “personal reasons” for his decision, Samsonite's board said it had decided that accepting his resignation “was in the best interests of the company and its shareholders.” Kyle Gendreau, formerly Samsonite’s chief finance officer and executive director, has taken over as CEO with immediate effect.
Samsonite is investing in its Hungary suppliers – see Plasteurope.com of 29.05.2018 – giving a boost to its “Made in Europe” strategy. The suitcase producer has two production sites in Hungary and one in Oudenaarde / Belgium.
Blue Orca made the accusations in a short seller report on 24 May 2018, in which it said the owner of brands such as “Tumi” and “American Tourister” had “concealed slowing growth through debt-fuelled acquisitions and had massaged earnings and inflated margins through highly questionable purchase price accounting.”
However, Samsonite issued a statement on 1 June, saying, “The conclusions drawn in the report about the company and its financial results are incorrect. The company's financial disclosures are an accurate reflection of the strong core fundamentals of the business.”
Samsonite, which specialises in lightweight but ultra-strong luggage made from PP fibres, said its financial reporting systems conform to International Financial Reporting Standards (IFRS) and other applicable laws. It stood behind its track record of transparency and corporate governance.
Describing Samsonite as a “mid-level brand masquerading as a premium luxury player,” Blue Orca has called on the luggage group’s board of directors to appoint an independent audit firm to scrutinise all transactions involving its south Asian joint venture, treatment of inventory, purchase price accounting and connections between the company and its CEO. “Ultimately, we believe that Samsonite is simply carrying too much baggage to trade at such a high premium,” the investor said.
In other news, Samsonite’s CEO Ramesh Tainwala subsequently quit his role on 1 June following allegations by Blue Orca that he had falsely claimed to have a doctorate in business administration. Although Tainwala cited “personal reasons” for his decision, Samsonite's board said it had decided that accepting his resignation “was in the best interests of the company and its shareholders.” Kyle Gendreau, formerly Samsonite’s chief finance officer and executive director, has taken over as CEO with immediate effect.
Samsonite is investing in its Hungary suppliers – see Plasteurope.com of 29.05.2018 – giving a boost to its “Made in Europe” strategy. The suitcase producer has two production sites in Hungary and one in Oudenaarde / Belgium.
08.06.2018 Plasteurope.com [239895-0]
Published on 08.06.2018
German version of this article...