Samsonite unit files for bankruptcy
03 Sep 2009
Samsonite Company Stores, the US retail division of luggage maker Samsonite Corporation has filed for bankruptcy protection under Chapter 11, in order to tide over the recession which held back many Americans from traveling, causing slump in demand for the company's products.
Through the bankruptcy protection launched yesterday in the US Bankruptcy Court in Wilmington, Delaware, the company aims for restructuring by reducing its high-end retail outlets and concentrate on more profitable stores, to reduce the costs and boost its earnings.
Samsonite Company said that it had $1.5 billion in debts as of 31 July, whereas the company's assets stood at $233 million.
"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," Kyle Gendreau, Samsonite Company's secretary and treasurer, said in a statement.
Mansfield, Massachusetts-based Samsonite's retail division has 173 shops in 38 US states. It is believed that the company would pull down the shutters of as many as 84 stores.
In 2007, Samsonite Corporation was taken over by UK-based CVC Capital Partners for $1.7 billion, and shifted its headquarters from Denver to Mansfield.