Samsonite, the big international luggage group quoted on the Hong Kong Stock Exchange, has reached an agreement to acquire High Sierra Sport Company, an American company specializing in the production of backpacks and other casual, outdoor and sports bags.
The international reach of Samsonite should also help High Sierra to widen its distribution worldwide. Approximately 90 percent of High Sierra's sales are still generated from the domestic market. The company is based at Gurnee, Illinois, near Chicago,
Through this acquisition, Samsonite will also gain access to U.S. sporting goods retailers, a distribution channel where it currently has a limited presence. Samsonite intends to open several High Sierra retail stores in North America and elsewhere. It sees opportunities for brand extensions, both directly and through licenses.
In March 2011, High Sierra extended its contract as the official supplier of bags and luggage for the U.S. Ski Team and U.S. Snowboarding for eight years. It also signed up the U.S. Freeskiing federation through 2019.
Samsonite has agreed to pay $110 million for the acquisition, in a cash deal that was expected to close by the end of July. The company says it will be accretive to its earnings as of next year. High Sierra's sales grew by 31 percent in 2011 to $64 million. Net profit for the company reached $6.7 million, up from $5.5 million in the previous year.