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Samsonite Corp/FL – ‘S-1’ on 5/18/06

On:  Thursday, 5/18/06, at 9:52pm ET   ·   As of:  5/19/06   ·   Accession #:  1047469-6-7430   ·   File #:  333-134271

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 5/19/06  Samsonite Corp/FL                 S-1                    2:1.5M                                   Merrill Corp/New/FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1         Registration Statement (General Form)               HTML   1.52M 
 2: EX-23.1     Consent of Experts or Counsel                       HTML      5K 

As filed with the Securities and Exchange Commission on May 18, 2006

Registration No. 333-         

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

SAMSONITE CORPORATION
(Exact name of registrant as specified in its charter)

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this registration statement becomes effective.

            If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

            If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

            If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

CALCULATION OF REGISTRATION FEE

(1)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)

Includes shares subject to the underwriters' over-allotment option.

            The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

          This registration statement relates to a global offering of shares of common stock of Samsonite Corporation. In connection with the global offering, Samsonite will have its shares of common stock listed on the Official List of the U.K. Financial Services Authority and admitted to trading on the London Stock Exchange, which is expected to be the principal trading market for Samsonite's common stock following the offering. The form of prospectus to be used outside of the United States (the "Non-U.S. Prospectus") will be identical to the form of prospectus to be used in the United States (the "U.S. Prospectus"), except that the Non-U.S. Prospectus will have a different cover page and will contain certain legends and required disclosures in the pages immediately following the cover page. The form of U.S. Prospectus follows immediately after this Explanatory Note. Following the form of U.S. Prospectus are the alternate cover and other pages for the Non-U.S. Prospectus, each of which is marked "Alternate Page for Non-U.S. Prospectus".

The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion

PROSPECTUS

Preliminary Prospectus dated May 18, 2006

             Shares

Common Stock

          This is a public offering of shares of our common stock (the "Shares"). Samsonite Corporation is selling              Shares and certain of our stockholders are selling              Shares at an offer price expected to be between              pence and              pence per Share. We will not receive any proceeds from the sale of Shares offered by the selling stockholders.

          Investing in the Shares involves risks that are described in the "Risk Factors" section beginning on page 14 of this prospectus.

          Our Shares are currently traded in interdealer and over-the-counter transactions, and price quotations have been available in the "pink sheets" under the symbol "SAMC.OB". Price quotations are also available on the Over-The-Counter Bulletin Board (the "OTCBB"). On May 17, 2006, the best bid price and last sale price of the Shares as reported by the Pink Sheets LLC at www.pinksheets.com and the OTCBB at www.otcbb.com were $1.06 per share and $1.02 per Share, respectively.

          Application will be made for our Shares to be admitted to the Official List of the U.K. Financial Services Authority and to trading on the London Stock Exchange under the symbol "    " (together referred to as "Admission").

          If the underwriters sell more Shares than the total number set forth in the table above, the underwriters have an option to buy up to an additional             Shares from certain of the selling stockholders to cover such sales. They may exercise that option for 30 days after the date of commencement of conditional dealings in the Shares on the London Stock Exchange.

          Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

          The Shares will be ready for delivery on or about                          , 2006.

Joint Bookrunners, Global Coordinators and Sponsors

Co-Lead Managers

The date of this prospectus is                          , 2006

TABLE OF CONTENTS

          No dealer, salesperson or other person is authorised to give any information or to represent anything not contained in this document. You must not rely on any unauthorised information or representations. This document is an offer to sell only the Shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this document is current only as of its date. Our business, financial condition, results of operations and prospects may have changed since that date.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

          The U.S. Securities Exchange Commission, or SEC, encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. We make these types of statements directly in this document. Words such as "anticipates", "estimates", "expects", "projects", "intends", "plans", "believes" and words or terms of similar substance used in connection with any discussion of future operating results or financial performance identify forward-looking statements.

          These forward-looking statements involve certain risks and uncertainties. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include, among others, the following factors:

•

a general decrease in travel levels or a downturn in the economy;



•

our inability to respond to changes in consumer demands and market trends;



•

our inability to implement our growth strategies, including our retail strategy;



•

a failure to maintain effective distribution channels;



•

the loss of any key license under which we manufacture and market goods;



•

a failure by our vendors to manufacture or deliver products in a timely, cost-effective manner or to meet our quality standards;



•

a failure to protect and promote our trademarks, patents and other proprietary rights;



•

an increase in competitive pressure among companies in our industry;



•

actions taken by Ares Management, LLC, or, together with its affiliates, Ares, Bain Capital (Europe) LLC, or Bain Capital, and the Ontario Teachers Pension Plan Board, or OTPP, together referred to in this document as the "Major Stockholders";



•

fluctuations in currency exchange and translation rates;



•

complications in connection with our implementation of SAP information management software;



•

our plans to relocate certain of our management functions to the United Kingdom;



•

an increase in interest rates that causes our borrowing costs to rise; and



•

adverse changes in the securities markets generally.

          All forward-looking statements reflect our present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The factors under "Risk Factors" set out in Part II of this document, as well as any cautionary language in this document, provide examples of these risks and uncertainties. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this document. We are under no obligation, and expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

1

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Financial Information

          Unless otherwise indicated, financial information in this document has been prepared in conformity with accounting principles generally accepted in the United States, or U.S. GAAP. This document contains audited financial information for the three year period ended January 31, 2006 prepared in accordance with U.S. GAAP. Prior to Admission, this document will be amended to include unaudited financial information for the three months ended April 30, 2006 prepared in accordance with U.S. GAAP. U.S. GAAP and International Financial Reporting Standards, or IFRS, issued by the International Accounting Standards Board as adopted by the European Commission for use in the European Union differ in certain significant respects. A summary of certain differences between U.S. GAAP and IFRS relevant to us is set out in Part VIII of this document.

          We and our U.S. subsidiaries prepare our financial statements according to a fiscal year ending on January 31, but our non-U.S. subsidiaries prepare their financial statements according to a fiscal year ending on the previous December 31. The consolidated accounts for our group are prepared for a fiscal year ending on January 31, and we consolidate accounts prepared to the same date for us and our U.S. subsidiaries and to the previous December 31 for our non-U.S. subsidiaries. All financial information in this document is given on a consolidated basis for our group. References in this document to a fiscal year denote the calendar year in which the fiscal year for our consolidated financial statements ended (for example, the "2006 fiscal year" or "fiscal year 2006" refer to the 12 months ended January 31, 2006).

          We are in the process of replacing all of our various business information systems worldwide with the SAP Enterprise Resource Planning (ERP) system. As part of this process, we may change the fiscal year according to which we prepare our consolidated financial statements so that it ends on December 31. If we change our fiscal year, our first set of consolidated results following Admission will be our results for the period ending December 31, 2006. This will consolidate our financial statements and those of our U.S. subsidiaries for the 11 months ended December 31, 2006 and the financial statements of our non-U.S. subsidiaries for the 12 months ended December 31, 2006. However, there can be no assurance that we will be able to successfully implement our ERP system on the planned timetable. If implementation is delayed, we may not change the fiscal year according to which we prepare our consolidated financial statements until the period ending on December 31, 2007. See "Risk Factors — Risks Related to Our Business and Industry — Our business may be adversely affected if we encounter complications in connection with our implementation of SAP information management software" in Part II of this document. References in this document to the "2007 fiscal year" or "fiscal year 2007" refer to the fiscal year ending on January 31, 2007 or, assuming we change our fiscal year as we expect, to the fiscal year ending on December 31, 2006.

Share Information

          Prior to completion of the global offering, each of our Shares issued and outstanding on the date of Admission will be converted into and reconstituted into a smaller number of Shares represented by the ratio of one-for-             Shares, as described under paragraph 2.5 of "Additional Information" set out in Part XVI of this document. Unless otherwise indicated and save for information contained in our historic financial statements set out in Part XIV of this document, once this ratio has been determined, all historic share numbers, share prices and other share related information presented in this document will be adjusted to reflect what such share numbers, share prices and other share related information would have been had the stock consolidation already taken place at the relevant time.

          In addition, unless otherwise indicated and save for information contained in our historic financial statements set out in Part XIV of this document, any information that we provide in this document in relation to our expected share capital immediately following Admission or other share ownership numbers will be adjusted to take account of the automatic conversion of our existing issued 2003 convertible preferred stock (the "2003 convertible preferred stock") into Shares that will take place automatically upon Admission in accordance with the terms of such 2003 convertible preferred stock. Such conversion includes the acceleration of the accrual of dividends as follows. Immediately prior to completion of the global offering, the accrual of dividends on our 2003 convertible preferred stock for the period up to and including the dividend payment date falling on June 15, 2007 shall be accelerated and be deemed to have fully accrued. Such conversion also assumes that no dividends on our 2003 convertible preferred stock have been paid and that no shares of our 2003 convertible preferred stock

2

have been converted into Shares until their automatic conversion in connection with the global offering. On this basis, immediately prior to the global offering, each share of our 2003 convertible preferred stock will automatically convert into 3,236.4929 Shares. As of March 31, 2006, assuming the accelerated accrual of dividends, there were 159,082 shares of 2003 convertible preferred stock outstanding and they would have been convertible into 514,867,765 Shares. The actual 2003 convertible preferred stock conversion rate is subject to adjustment in the event that any unpaid 2003 convertible preferred stock dividends are paid prior to any such conversion.

          For further information on our capitalisation, see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Capitalisation and Indebtedness Statement" set out in Part VII of this document and "Additional Information — Share Capital" set out in Part XVI of this document.

Industry and Market Data

          Market data and other statistical information used throughout this document are based on independent industry publications, reports by market research firms or other published independent sources such as Global Industry Analysts, Inc., or GIA, and Hall and Partners. Some data are also based on our good faith estimates, which are derived from our review of internal surveys, as well as the independent sources listed above. Although we believe these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and completeness.

Other Information

          In this document, references to the "United States" or "U.S." are to the United States of America and references to "U.S. dollars" or "$" are to the lawful currency of the United States, references to "pound", "pounds sterling", "sterling", "£" or "p" are to the lawful currency of the United Kingdom, references to the "E.U." are to the European Union, and references to "euro", "€" or "EUR" are to the currency introduced on January 1, 1999 pursuant to the Treaty on European Union signed in 1992. We prepare our financial statements in U.S. dollars.

          Unless the context requires otherwise all references herein to "Samsonite", "our group", "we", "our" or "us" mean Samsonite Corporation and its consolidated subsidiaries, and references to the "Company" are to Samsonite Corporation only.

3

EXCHANGE RATE VARIATION

          The following chart indicates (i) for the period from February 1, 2003 through January 31, 2006, our fiscal year period end, period average and high and low Noon Buying Rates in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York and (ii) for the period from February 1, 2006 to May 16, 2006, the monthly period end, period average and high and low Noon Buying Rates, in each case expressed in U.S. dollars per £1.00. The rates below may differ from the actual rates used in the preparation of the combined financial statements and other financial information which appear elsewhere in this document. Our inclusion of these exchange rates is for illustrative purposes only and does not mean that the sterling amounts actually represent such dollar amounts or that such sterling amounts could have been converted into U.S. dollars at any particular rate, if at all. The Noon Buying Rate of the pound on May 16, 2006 was U.S.$1.88= £1.00.

Note:

(1)

The average of the Noon Buying Rates on the last business day of each month during the relevant period for yearly averages; on each business day of the month (or portion thereof) for monthly averages.

          Fluctuations between the pound and the U.S. dollar will affect the U.S. dollar equivalent of the sterling price of the Shares traded on the London Stock Exchange. Such fluctuations also will affect the sterling amounts received by U.K. stockholders upon conversion of cash dividends, if any, paid in U.S. dollars with respect to the Shares.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

          We file annual, quarterly and special reports, proxy statements and other information with the SEC. You can inspect and copy these reports, proxy statements and other information at the Public Reference Room of the SEC, 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Our SEC filings are also available to you on the SEC's website at http://www.sec.gov. We also make available on our website our annual reports on Form 10-K and quarterly reports on Form 10-Q, as soon as reasonably practicable after filing such materials with the SEC.

ENFORCEABILITY OF JUDGMENTS

          We are incorporated in the State of Delaware under the Delaware General Corporation Law, or DGCL. Certain of our directors and executive officers are citizens or residents of countries other than the United States. All or a substantial portion of the assets of such persons and a substantial portion of our assets are located outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons, or to enforce against them judgments of U.S. courts, including judgments predicated upon civil liabilities under the securities laws of the United States or any state or territory within the United States. There is substantial doubt as to the enforceability in the United Kingdom in original actions or in actions for enforcement of judgments of U.S. courts, based on the civil liability provisions of U.S. federal securities laws.

4

DIRECTORS, SECRETARY, REGISTERED OFFICE, HEAD OFFICE AND ADVISERS

Directors

          Prior to Admission, we expect that Mr. Richard Wiley, who is one of our executive officers serving the role of Chief Financial Officer, Treasurer and Secretary, will be appointed to our Board of Directors as an executive Director. In addition, prior to or as soon as practicable after Admission, we expect that certain of the non-executive Directors currently on our Board of Directors will resign from their positions. Prior to or as soon as practicable after Admission, we also expect to appoint a non-executive Chairman and one new non-executive Director to our Board of Directors. We expect to make these changes to the composition of our Board of Directors in order to reconstitute our Board of Directors in a manner that will reflect more closely the recommendations set out in the U.K. Combined Code on Corporate Governance in relation to Board composition. See "Directors, Executive Officers and Corporate Governance — Corporate Governance" set out in Part V of this document. There can be no assurance that these changes will be effected prior to or soon after Admission or at all. In addition, if the global offering does not proceed, we may not make any such changes to the composition of our Board of Directors.

Registered Office

Samsonite Corporation
c/o Prentice-Hall Corporation System, Inc.
2711 Centerville Road, Ste. 400
Wilmington, Delaware 19808

Head Office and Directors' Addresses

Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239

Advisers

Joint Bookrunners, Global Coordinators and Sponsors

5

Registrar and Receiving Agent

Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 1XZ

6

GLOBAL OFFERING STATISTICS

Notes:

(1)

It is expected that the offer price will be within the offer price range. The offer price range is indicative only and may change during the course of the global offering, and the offer price may be set within, above or below the offer price range. The initial offer price for our Shares will be determined by us, the Major Stockholders and the underwriters following a bookbuilding process. Among the factors to be considered in determining the offer price, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and consideration of the above factors in relation to the market valuation of companies in related businesses. The offer price may differ significantly from prices prevailing in over-the-counter transactions and price quotations that have historically been available. See "Details of the Global Offering — Allocation and Pricing" set out in Part XV of this document.

(2)

Based on an offer price of             pence, being the mid-point of the offer price range.

(3)

The aggregate number of Shares to be sold by the selling stockholders is dependent on the offer price and may be higher or lower than this number. Other factors which may influence the number of Shares to be sold include prevailing market conditions and the composition and quality of the order book for our Shares following a bookbuilding process.

(4)

This figure will be up to    per cent of the aggregate number of Shares made available in the global offering and is subject to pro rata increase or decrease in the event that the aggregate number of Shares available under the global offering is increased or decreased, as the case may be.

(5)

Assumes no exercise of the over-allotment option.

(6)

Given the amounts of proceeds we and the selling stockholders hope to raise in the global offering, a £1.00 increase (decrease) from the mid-point of the offer price range would increase (decrease) the number of Shares being sold by the selling stockholders and us by              Shares and              Shares, respectively. Any such changes in the number of Shares being offered and sold would have a corresponding impact on the percentage of Shares held by the selling stockholders after the global offering.

          The initial offer price range should not be relied on as indicative of the price or value of our Shares and, save for any responsibility or liability that may be imposed by the FSMA or the regulatory regime established thereunder or by other applicable law, we, the selling stockholders and the underwriters disclaim all liability or responsibility whether arising in contract, tort or otherwise to persons acting or relying on the offer price range as indicative of the price or value of our Shares.

7

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

          All times are London times. Each of the times and dates in the above timetable is subject to change.

          It should be noted that, if Admission does not occur, all conditional dealings will be of no effect and any such dealings will be at the sole risk of the parties concerned.

8

PART I: SUMMARY INFORMATION

          The following summary should be read as an introduction to this document. It does not purport to be complete. Any decision to invest in the Shares should be based on consideration of this document as a whole by the investor and not solely on this summarised information. Where a claim relating to the information contained in this document is brought before a court in a Member State of the European Economic Area, or EEA, the plaintiff investor might, under the national legislation of the Member State where the claim is brought, be required to bear the costs of translating this document before legal proceedings are initiated. Following the implementation of the relevant provisions of the Prospectus Directive (Directive 2003/71/EC) in each member state of the EEA, no civil liability will attach to those persons responsible for this summary in any such member state, including any translations of this summary, unless it is misleading, inaccurate or inconsistent when read together with the other parts of this document.

Information on Samsonite

          We are one of the world's largest and most recognised designers and distributors in the luggage industry, as well as one of the leading distributors of business, computer, outdoor, and casual bags. We sell our products under a number of well-known brand names, primarily Samsonite® Black Label, Samsonite®, and American Tourister®, and licensed brand names such as Lacoste®. We also intend to start distributing licensed Timberland® products in fiscal year 2007. With net sales of $966.9 million for fiscal year 2006, an increase of approximately 7.1 per cent from the preceding fiscal year, we are the leader in the global luggage industry and significantly larger than any of our regional competitors. Our net sales for fiscal years 2005 and 2004 were $902.9 million and $776.5 million, respectively. Our compound annual growth rate, or CAGR, on sales since fiscal year 2003 is 8.7 per cent. In fiscal year 2006, we had consolidated net income before preferred stock dividends of $13.3 million, compared to a loss of $9.7 million before preferred stock dividends in fiscal year 2005 and net income of $2.8 million before preferred stock dividends in fiscal year 2004. In fiscal year 2006, we had a net loss to common stockholders (after preferred stock dividends) of $1.5 million compared to a net loss to common stockholders of $23.4 million and $28.3 million in fiscal years 2005 and 2004, respectively.

          Our product assortment includes product lines appealing to a broad range of consumers, from those focused on luxury under the Samsonite® Black Label product lines; quality, functionality and durability under the Samsonite® lines; or value-consciousness under the American Tourister® brand. In addition to using our Samsonite® and American Tourister® brand names on the products we manufacture or distribute, we license these brand names to third parties for use on products that include travel accessories, leather goods, furniture and other products.

          Our products are sold in more than 100 countries at various types of retail establishments, including 284 Samsonite-operated retail stores in North America, Europe, Asia and Latin America, over 150 shop-in-shop corners principally in Asia and 173 franchised retail stores, principally in India and South Korea. In addition, our products are sold through www.samsonitecompanystores.com, www.samsoniteblacklabel.com and the websites of many of our customers. We design the majority of our luggage products at our facilities in Europe, North America and Asia. Our products are produced by carefully selected third party suppliers or Samsonite-operated manufacturing facilities. Sales in Europe, North America and in our other markets (including Asia and Latin America) comprised 43.2 per cent, 37.6 per cent and 17.5 per cent of our net sales, respectively, in fiscal year 2006. Licensing revenues comprised the remaining 1.7 per cent of total revenues.

          Our principal corporate office is at 11200 East 45th Avenue, Denver, Colorado 80239, our telephone number is + 1 303 373 2000, and our main website is www.samsonite.com. In May 2006, we are opening a new executive office at Samsonite House, 4 Mondial Way, Harlington, Middlesex UB3 5AR, United Kingdom, where our Chief Executive Officer and executives responsible for core global functions will be based.

Competitive Strengths

          We have a premier global brand franchise in a leading industry position based on:

•

our complementary portfolio of strong, well-known brands;



•

our worldwide distribution; and



•

leading global brand awareness fuelled by increasing marketing and advertising.

9

          We have strong growth prospects based on our:

•

operation in a dynamic industry;



•

diversified and steady revenue stream; and



•

industry leading position in product innovation.

          We have superior operating performance based on:

•

an effective global manufacturing and sourcing network; and



•

sustained and reliable cash flow generation.

          We also have an experienced and incentivised management team.

Strategy

          We are pursuing strategic initiatives that are designed to capitalise on our underlying business strengths, growing and diversifying our revenue stream, improving our profitability and enhancing the resiliency of our business. Key elements of our business development strategies include:

•

introducing a stream of innovative and contemporary products into the market;



•

strengthening support behind our brand and product marketing and advertising;



•

expanding our retail distribution platform;



•

pursuing expansion opportunities in high-growth geographic markets;



•

exploiting new business opportunities;



•

improving our gross margins; and



•

continuing to improve operating efficiencies and cash flow generation.

Summary Financial Information

          The table below sets out our summary financial information for the periods indicated. The data has been extracted without material adjustment from, and should be read in conjunction with, our consolidated financial statements prepared in accordance with U.S. GAAP. U.S. GAAP and IFRS differ in certain significant respects.

10

Notes:

(1)

We have restated our consolidated financial statements for fiscal years 2005, 2004 and 2003 to correct an error in computing our deferred tax asset valuation allowance. See Note 2 to the consolidated financial statements included elsewhere herein.

(2)

Loss per Share — basic and diluted for the fiscal years 2006, 2005, 2004, 2003 and 2002 was computed based on the weighted average number of Shares outstanding during the respective periods. Basic loss per Share and diluted loss per Share are the same because the net loss to stockholders causes potentially dilutive Shares for options, warrants, and convertible preferred stock to be anti-dilutive.

Risk Factors

Risks Related to Our Business and Industry

•

Events which negatively affect consumer travel levels, or a downturn in the economy, negatively affect our business.



•

Our inability to respond to changes in consumer demands and market trends could adversely affect our sales.



•

Our ability to continue our sales growth is dependent upon the further implementation of our growth strategies, which we may not be able to sustain.



•

Part of our retail strategy relies upon our ability to lease quality locations at competitive prices. We may incur significant costs if our retail strategy fails and we are forced to close retail locations.



•

We must be able to maintain effective distribution channels that serve our customers' purchasing patterns, and control over our wholesale and license distribution channels is critical.



•

Some of our product lines are manufactured under licensed trademarks and any failure to retain or renew such licenses on acceptable terms may have an adverse effect on our business.



•

Brand recognition and image are important to the success of companies in our industry.



•

We may not be able to realise the cost-saving benefits associated with the use of overseas third party vendors, and our vendors may be unable to deliver products in a timely cost-effective manner or to meet our quality standards.



•

We are dependent on our trademarks and patents, and our products are and may continue to be the subject of counterfeit reproduction.



•

The luggage market is highly fragmented; we face competition from many smaller competitors.



•

Failure to attract and retain key and qualified personnel may adversely affect our ability to conduct our business.



•

Our Major Stockholders currently exercise significant influence over us.

11

•

The business of our subsidiaries with international operations may be adversely affected by international business risks and fluctuations in currency exchange and translation rates.



•

Any material weaknesses in our internal control over financial reporting could result in a misstatement in our financial statements.



•

Our business may be adversely affected if we encounter complications in connection with our implementation of SAP information management software.



•

We have plans to relocate certain of our management functions to the United Kingdom. Such relocation, if not structured in an appropriate manner, could lead to material adverse tax consequences for the group.



•

If interest rates rise, our operating results may decline due to higher borrowing costs.



•

We have a leveraged capital structure which could adversely affect our financial health, our ability to service our indebtedness and to grow our business.



•

We are subject to restrictive covenants imposed by our existing credit facility, by the indentures governing notes we have issued and by an agreement we are party to with the Pension Benefit Guaranty Corporation.



•

We have significant underfunded and unfunded U.S. pensions and post-retirement obligations, which could adversely affect our liquidity.



•

The indentures governing our senior and senior subordinated notes contain change of control provisions that could discourage a proposal for a takeover of us.



•

We are a U.S. company that is not subject to a significant amount of English legislation, rules, guidelines and codes of conduct, including the Combined Code and the City Code on Takeovers and Mergers.

Risks Related to the Global Offering

•

If an active trading market for the Shares does not develop, the price of the Shares may suffer and may decline below the offer price, and it may be difficult for investors to sell their Shares.



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The trading price of our Shares could be extremely volatile.



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Future sales or issuances of our Shares could adversely affect the trading price of our Shares.



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Investors in the global offering will suffer immediate and substantial dilution.



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Future issuances of our Shares, including pursuant to our stock option plans, could dilute your voting power and may reduce our earnings per Share.



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We cannot assure investors that we will make dividend payments in the future.

Summary of the Global Offering

          Assuming no exercise of the over-allotment option, the selling stockholders will offer an aggregate of             Shares under the global offering, representing    per cent of our issued share capital immediately following Admission. The aggregate number of Shares to be sold by the selling stockholders is dependent on the offer price and may be higher or lower than this number. Other factors which may influence this decision include prevailing market conditions and the composition and quality of the order book for our Shares following a bookbuilding process.

          Under the global offering, we will issue             Shares, raising proceeds of approximately £              million, net of underwriting commissions.

          The exact numbers of Shares to be issued by us and to be sold by the selling stockholders will be agreed between us, Merrill Lynch International and Goldman Sachs International (on behalf of the underwriters), and the Major Stockholders following the conclusion of the bookbuilding process.

          The Shares made available under the global offering, before any exercise of the over-allotment option, represent    per cent of our expected issued ordinary share capital immediately following Admission.

          If the underwriters sell more Shares than the total number agreed to be sold by the selling stockholders and us, the underwriters will have an option to buy up to an additional              Shares from

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certain of the selling stockholders to cover such sales. They may exercise that option for 30 days after the date of commencement of conditional dealings in the Shares on the London Stock Exchange.

          Under the global offering, Shares will be offered to certain institutional, professional and other investors. Certain restrictions that apply to the distribution of this document and the Shares being issued and sold under the global offering in jurisdictions outside the United Kingdom are described under "Details of the Global Offering — Selling Restrictions" set out in Part XV of this document.

Lock-Up Agreements

          Pursuant to the Underwriting Agreement, we will agree that, subject to certain exceptions, during the period of 180 days from the date of Admission, we will not, without the prior written consent of the joint global coordinators, issue, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offer of, any Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing. The exceptions to this include the issue of Shares pursuant to the global offering and the issue of Shares pursuant to the exercise of options under share option schemes in existence on the date of Admission.

          Pursuant to the Underwriting Agreement, the Major Stockholders will agree that, during the period of 180 days, and the executive Directors and our executive officers will agree that, during the period of 360 days, from the date of Admission, subject to certain exceptions, they will not, without the prior written consent of the joint global coordinators, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce an offer of any Shares (or any interest therein or in respect thereof) or enter into any transaction with the same economic effect as any of the foregoing.

Use of Proceeds

          We will receive approximately £              million in net proceeds from the global offering after deducting estimated underwriting commissions and expenses payable by us. We will not receive any of the proceeds from the sale of Shares by the selling stockholders. We will use the net proceeds payable to us primarily to pay for the expenses we and the selling stockholders have incurred in connection with the global offering.

Dividend Policy

          We have not declared any cash dividends on our Shares and do not currently anticipate paying cash dividends in the foreseeable future. The payment of dividends will be a business decision to be made by our Board of Directors from time to time based on such considerations as the Board of Directors deems relevant. In addition, dividends are payable only out of funds legally available under Delaware law, subject to any restrictions which may be contained in our debt instruments. The payment of dividends on our Shares is also currently restricted by our senior revolving credit facility and the indentures governing our euro floating rate senior notes and 8⁷/8 per cent senior subordinated notes.

Principal Stockholders

          Following the completion of the global offering, our three Major Stockholders and their affiliates will own in aggregate approximately    per cent of our outstanding voting stock (assuming no exercise of the over-allotment option). No individual Major Stockholder is expected to own more than    per cent of our outstanding voting stock. We are currently party to a Stockholders Agreement with the Major Stockholders relating to their rights as stockholders in Samsonite and the corporate governance of Samsonite. In addition, we are currently party to Advisory Agreements with each of our Major Stockholders or their designee. For the purpose, among others, of ensuring that we are eligible for Admission as an entity which operates independently as required by the Listing Rules of the UK Listing Authority, we are expecting, prior to (and conditional upon) Admission, to terminate this Stockholders Agreement and the Advisory Agreements, in the case of the latter, on payment of certain termination fees. We expect at such time to enter into a letter agreement with our Major Stockholders, pursuant to which, subject to Ares, Bain Capital or OTPP, as the case may be, individually owning at least 10 per cent of our issued and outstanding share capital, each of our Major Stockholders will agree to take all action lawfully within its power to cause the Board of Directors to include one director nominated by Ares, Bain Capital or OTPP, respectively. While we believe our Board will be capable of operating effectively and independently of our Major Stockholders on Admission, the rights which our Major Stockholders will retain may nonetheless permit them to exercise a significant influence over our operations.

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PART II: RISK FACTORS

          Prospective investors in the Shares should carefully consider the risks described below and other information in this document before acquiring any Shares. Any of the risks described below could have a material adverse effect on our business, financial condition and operating results and could therefore have a negative effect on the trading price of the Shares. Some of the following factors relate principally to our business and the sector in which we operate. Other factors relate principally to an investment in the Shares. The risks and uncertainties described below are not intended to be exhaustive and should be read in conjunction with the rest of this document. Additional risks and uncertainties not presently known to us, or which we currently deem immaterial, may also have a material adverse effect on our business, financial condition and operating results and could therefore have a negative effect on the trading price of the Shares and affect your investment.

Risks Related to Our Business and Industry

Events which negatively affect consumer travel levels, or a downturn in the economy, negatively affect our business.

          Demand for our products is affected by the public's attitude towards the safety of travel, particularly air travel, the international political climate and the political climate of destination countries. Hostilities in the Middle East and other regions, events such as terrorist attacks and the threat of additional attacks, and the resulting political instability and concerns over safety and security aspects of travelling, may have an adverse impact on demand for our products. Additionally, the incidence or spread of contagious diseases (such as Severe Acute Respiratory Syndrome, commonly known as SARS, or Avian flu) may lead to a general reluctance by the public to travel, which could cause a decrease in demand for our luggage products and, as a result, may have an adverse effect on our sales, results of operations and financial condition.

          Our sales levels are correlated to general economic and business conditions in the global markets in which we sell our products. Our business is subject to economic conditions in our major markets, including recession, inflation, deflation, general weakness in retail and travel markets, and changes in consumer purchasing power. Any significant declines in general economic conditions or uncertainties regarding future economic prospects that affect consumer spending habits could have a material adverse effect on consumer purchases of our products and adversely affect our sales and gross profit margins.

Our inability to respond to changes in consumer demands and market trends could adversely affect our sales.

          Our success depends on our ability to identify, originate and define product and market trends as well as to anticipate, understand and react to changing consumer demands in a timely manner. Our future business prospects are dependent on our ability to enhance our existing luggage products and accessories and to develop and market innovative new offerings that achieve market acceptance. Our products must appeal to a broad range of consumers whose preferences cannot be predicted with certainty and are subject to rapid change. The enhancement of our luggage products and development of additional products are subject to all of the risks associated with new product development, including unanticipated delays, misjudgment of market trends, expenses or other difficulties that could result in the abandonment or substantial change in our product development projects and the marketing or acceptance of these enhancements or new offerings. In addition, failure to continually enhance our products and to keep pace with market trends could result in a decrease in sales of our products.

Our ability to continue our sales growth is dependent upon the further implementation of our growth strategies, which we may not be able to sustain.

          During recent years, we have experienced a growth in sales driven by our new products and geographical expansion strategies. Our ability to continue this growth is dependent on the successful continuation of these strategies. This includes diversification of our product offerings to include items beyond luggage, such as footwear and licensed products, and expansion of our Company-operated Samsonite retail and outlet locations. There can be no assurance that the expansion of our product offerings will be successful or that new products will be profitable or generate sales comparable to those we have recently experienced or that our increased emphasis on growth in the luxury goods market will result in our brand names and products achieving a high degree of consumer acceptance in that market.

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If we misjudge the market for our products, we may be faced with significant excess inventory for some products and missed opportunities for other products.

          Implementation of our business strategy also involves the continued expansion of our network of Company-operated retail stores around the world. Over the next two years, our goal is to open and operate directly or through franchises a number of additional Samsonite Black Label retail locations in large-market, fashion oriented international shopping districts in cities such as New York, London and San Francisco, as well as a number of additional Samsonite stores in high-traffic street locations and/or shopping malls. Our ability to continue opening these new store locations depends upon, among other things, our ability to operate them at a profit, finance their opening and operations, secure them at reasonable rental rates and hire and train management and personnel to staff the stores. If we cannot address these challenges successfully, we may not be able to expand our business or increase our revenues at the rate we currently contemplate.

Part of our retail strategy relies upon our ability to lease quality locations at competitive prices. We may incur significant costs if our retail strategy fails and we are forced to close retail locations.

          We lease the majority of our Company-operated retail stores. We are planning to increase our network of Company-operated retail stores around the world. Accordingly, the success of this aspect of our strategy is in part dependent on our ability to secure affordable, long-term leases and to secure renewals of such leases. Additional Samsonite Black Label retail stores will be located in areas typically associated with the sale of luxury goods. Such properties are generally highly sought after, and we may face intense competition from other companies for these locations. There can be no assurance that we will be able to purchase or lease desirable store locations or renew existing store leases on acceptable economic terms.

          In addition, we may be subject to potential financial risk associated with the cost of prematurely terminated leases. Failure of the Company-operated retail stores to grow revenues as expected may oblige management to close a store (or stores) and thereby terminate a lease agreement prior to its expiration. Premature termination of a lease agreement may cause us to incur asset write-downs for store lease acquisition costs, leasehold improvements, fixtures and fittings or inventory or incur a portion of the future lease costs after termination. In addition, it is possible that we may have to incur rental and other charges after closing such stores for undetermined periods up to the lease expiry date.

We must be able to maintain effective distribution channels that serve our customers' purchasing patterns, and control over our wholesale and license distribution channels is critical.

          The retail market, particularly in the United States, is marked by rapid changes in distribution channels and customer purchasing patterns. Our products are sold through diverse distribution channels, from our Company-operated stores, through our website, and through retail locations of others, including department and specialty stores, national and mass merchant retailers, and warehouse clubs. Therefore, maintaining good relationships with superior distribution or joint venture partners and establishing new distribution channels to better serve our customers' purchasing patterns is key to our continued success. Additionally, if distribution channel trends and purchasing preferences change and we are not positioned to take advantage of such changes, we could be excluded from important market segments and our sales and results of operations could be adversely affected.

          To achieve the geographical breadth that we are targeting, in some countries we enter into joint ventures to run our business. There can be no assurance that such joint ventures will prove successful. We also rely on our ability to control our distribution networks and licensees to ensure that our products are sold in environments consistent with our brand image. Any action by any significant wholesale customer or licensee, such as presenting Samsonite products in a manner inconsistent with our preferred positioning, could be damaging to our brand image. If, due to regulatory, legal or other constraints, we are in any way unable to control our wholesale distribution networks and licensees, the Samsonite brand image, and therefore our results and profitability, may be adversely affected.

Some of our product lines are manufactured under licensed trademarks and any failure to retain or renew such licenses on acceptable terms may have an adverse effect on our business.

          Our license agreement with Lacoste allows us to design, manufacture and market an extensive range of luggage, bags and leather goods under the Lacoste® brand name. Products sold under the Lacoste® brand name accounted for revenues of $47.4 million, or 5.0 per cent of our revenues, in fiscal

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year 2006. The Lacoste license agreement requires us, in each year, to achieve increasing minimum net sales of Lacoste® branded goods in the various territories in which we have agreed to sell such goods. If these minimum net sales are not achieved for two consecutive years in any particular territory, Lacoste has the right to terminate the license agreement with respect to that territory. Additionally, in fiscal year 2006, we entered into a license agreement with the Timberland Company, or Timberland, which allows us to design, manufacture and market luggage, business and computer cases and backpacks under the Timberland® brand name. The Timberland license agreement requires us in each year to achieve increasing minimum net sales of Timberland® branded goods and to make increasing annual royalty payments to Timberland. If we do not achieve these minimum net sales targets or make these royalty payments in any year, Timberland has the right to terminate the license agreement or to refuse to renew the license agreement when it expires on December 31, 2011. We may not be successful in maintaining or renewing the Lacoste or Timberland licenses, or other licenses which are of commercial value to us, on terms that are acceptable to us or at all. The loss of the Lacoste or Timberland licenses could have a material adverse affect on our business, results of operations and financial condition.

Brand recognition and image are important to the success of companies in our industry.

          Our financial performance is influenced by the success of our brands, which, in turn, depends on factors such as product design, the distinct character of the products, the materials used to manufacture the products, the image of our stores, communication activities, including advertising, public relations and marketing, and general corporate profile. Additionally, our business strategy relies, in part, upon the successful carry-over of the Samsonite® brand name to other product categories and the luxury goods market. Failure of the Samsonite® brand name to carry-over to other products or the luxury goods market, or failure to maintain or increase the stature of our pre-existing brands or to successfully develop new brands could have an adverse effect on our operating results and financial condition.

We may not be able to realise the cost-saving benefits associated with the use of overseas third party vendors, and our vendors may be unable to deliver products in a timely cost-effective manner or to meet our quality standards.

          A significant portion of our net sales is derived from products which are manufactured by third party vendors, a majority of which are located in Asia and Eastern Europe. A significant change in these countries' economic policies could adversely affect our ability to manufacture our products in such countries. The implementation of higher tariffs, quotas or other restrictive trade policies by those countries to which these third party vendors export their products could negatively impact the cost-saving benefits of these outsourced operations overseas. These factors could adversely affect our ability to maintain or commence low-cost operations outside the United States and the European Union. Additionally, the violation of labour or other laws by any of our third party vendors, or the divergence of third party vendors' labour practices from those generally accepted as ethical by us or others in the United States and the European Union, could damage our reputation and force us to find alternative manufacturing sources.

          These third party vendors are subject to many risks, including foreign governmental regulations, political unrest, disruptions or delays in shipments, changes in local economic conditions and trade issues. These factors, among others, could influence the ability of these third party vendors to make or export our products cost-effectively or at all or to procure some of the materials used in these products. We depend upon the ability of these vendors to secure a sufficient supply of raw materials, adequately finance the production of goods ordered and maintain sufficient manufacturing and shipping capacity. Additionally, currency exchange rate fluctuations could increase the cost of raw materials or labour for these third party vendors, which they could pass along to us, resulting in higher costs and lower margins for our products, if we cannot pass these higher costs on to customers.

          If any of these factors were to render a particular country undesirable or impractical as a source of supply, there could be an adverse effect on our business. Our reliance on these vendors and the lack of direct control over these operations could subject us to difficulty in obtaining timely delivery of products of acceptable quality. In addition, a vendor's failure to ship products to us in a timely manner or to meet our quality standards could cause us to miss the delivery date requirements of our customers. The failure to make timely deliveries may cause our customers to cancel orders, refuse to accept deliveries, demand reduced prices or reduce future orders, any of which could harm our sales, reputation and overall profitability.

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We are dependent on our trademarks and patents, and our products are and may continue to be the subject of counterfeit reproduction.

          As a leading luggage manufacturer and retailer, we are dependent on our ability to protect and promote our trademarks, patents and other proprietary rights. We believe that our trademarks are adequately supported by applications for registrations, existing registrations and other legal protections in our principal markets. We own approximately 110 U.S. patents and approximately 782 patents (i.e., patents of inventions, industrial design registrations and utility models) in selected countries other than the United States. In addition, we have approximately 323 patent applications pending worldwide. We pursue a policy of seeking patent protection where appropriate for inventions embodied in our products. The patents we hold provide barriers to competition in applicable portions of our business, primarily associated with hardside and hybrid luggage products. The loss of some or all of the protection of the patents could make it easier for other companies to enter our markets and compete against us by eroding our ability to differentiate our products. We cannot exclude the possibility that our intellectual property rights may be challenged by others or that we may be unable to register our intellectual property rights or otherwise adequately protect them in some jurisdictions. In addition, there can be no assurance that other companies will not be able to design and build competing products in a manner that does not infringe our patents.

          Furthermore, the luggage retail market is subject to numerous instances of product counterfeiting and other trademark infringements. A significant presence of counterfeit products on the market can negatively impact both the sales and the brand image of a manufacturer. Although we devote substantial resources on a worldwide basis to the protection of our intellectual property rights including, when appropriate, taking legal action, there can be no assurance that the actions taken by us to establish and protect the use of our intellectual property will be successful. The law and practice relating to the protection of intellectual property rights varies greatly from country to country and, as a result, our rights are more vulnerable in some jurisdictions than others. If any of our products are the subject of widespread counterfeit production or other similar trademark infringements, our business, financial condition and results of operations could be adversely affected.

The luggage market is highly fragmented; we face competition from many smaller competitors.

          We compete with many domestic and international companies in our global markets. We compete based on brand name recognition, consumer advertising, product innovation, quality, differentiation of product features, customer service and price. The worldwide luggage market is highly fragmented, meaning that we have many competitors. Our products compete with other brands of products within their product category and with private label products sold by retailers, including some of our wholesale customers. We compete with numerous manufacturers, importers and distributors of luggage, accessories and other products for the limited space available for the display of these products to the consumer. Given the general availability of contract manufactured products, barriers to entry into the manufacturing of softside luggage are relatively low and we face competition from many low-cost manufacturers of inexpensive, softside luggage products. We cannot guarantee that we will be able to compete effectively in the future in our markets.

Failure to attract and retain key and qualified personnel may adversely affect our ability to conduct our business.

          Our future success depends, in large part, on the efforts and abilities of our executive officers and design teams who execute our business strategy and identify and pursue strategic opportunities and initiatives. In particular, we are highly dependent on the continued services of Marcello Bottoli, our President and Chief Executive Officer, and other executive officers and key employees who possess extensive industry knowledge. We are a party to employment agreements with these executives which provide for compensation and other benefits. The agreements also provide for severance payments under certain circumstances. The loss of the services of these persons for any reason, as well as any negative market or industry perception arising from that loss, could have a material adverse effect on our business. We may incur costs to replace key employees who leave, and our ability to execute our business model could be impaired if we cannot replace departing employees in a timely manner. As the business grows, we will need to attract and retain additional qualified personnel and develop, train and manage an increasing number of management level, sales and other employees. We cannot guarantee that we will be able to attract and retain personnel as needed in the future.

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Our Major Stockholders currently exercise significant influence over us.

          Our three Major Stockholders and their affiliates currently control approximately 85 per cent of our voting stock (or, assuming conversion of our 2003 convertible preferred stock for Shares and exercise of certain warrants to subscribe for Shares, 86 per cent of our Shares). We are party to a Stockholders Agreement dated as of July 31, 2003 with the Major Stockholders and others relating to their rights as stockholders in Samsonite and the corporate governance of Samsonite (referred to in this document as the "Sponsors' Stockholders Agreement"). In addition, we are currently party to advisory agreements with our Major Stockholders or their designees, pursuant to which we are required to pay each of our Major Stockholders or its designee an annual advisory fee (referred to in this document as the "Advisory Agreements"). Pursuant to the terms of the Sponsors' Stockholders Agreement, the Major Stockholders have agreed to take all actions in their power to elect nominees selected by the Major Stockholders to our Board of Directors. As a result, eight of the nine members of our Board of Directors are nominees of the Major Stockholders, of whom five are employed by or otherwise affiliated with one of the Major Stockholders. In addition, pursuant to the Sponsors' Stockholders Agreement, our ability to take certain actions, including amending our charter, commencing bankruptcy proceedings and taking certain corporate actions (including debt incurrences, stock issuances, acquisitions, asset sales and the like), is subject to the written consent of either all or two-thirds (depending on the action) of the Major Stockholders so long as the Major Stockholders collectively continue to hold at least 25 per cent of our outstanding voting stock. Accordingly, our Major Stockholders currently exercise significant influence over our Board of Directors and business and operations.

          Following the completion of the global offering, our three Major Stockholders and their affiliates will own in aggregate approximately          per cent of our outstanding voting stock (assuming no exercise of the over-allotment option). No individual Major Stockholder is expected to own more than          per cent of our outstanding voting stock. Most corporate actions only require a majority vote of our stockholders. For the purpose, among others, of ensuring that we are eligible for Admission as an entity which operates independently as required by the Listing Rules of the UK Listing Authority, we are expecting, prior to (and conditional upon) Admission, to terminate the Sponsors' Stockholders Agreement and the Advisory Agreements, in the case of the latter, on payment of certain termination fees. We expect at such time to enter into a letter agreement with our Major Stockholders, pursuant to which, subject to Ares, Bain Capital or OTPP, as the case may be, individually owning at least 10 per cent of our issued and outstanding share capital, each of our Major Stockholders will agree to take all action lawfully within its power to cause the Board of Directors to include one director nominated by Ares, Bain Capital or OTPP, respectively. Pursuant to this letter agreement, we will also grant the Major Stockholders certain demand registration rights and piggyback registration rights that are similar to equivalent rights that the Major Stockholders currently have under the Sponsors' Stockholders Agreement. While we believe that our Board will be capable of operating effectively and independently of our Major Stockholders on Admission, the rights which our Major Stockholders will retain may nonetheless permit them to exercise a significant influence over our operations. The level of ownership of the voting stock by our Major Stockholders could have the effect of making more difficult, or of discouraging, absent the support of our Major Stockholders, a proxy contest, a merger involving Samsonite, a tender offer, an open market purchase program or purchases of Samsonite common stock that could give holders of such stock the opportunity to realise a premium over the then-prevailing market price for their Shares. Our Major Stockholders may have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to your interests.

The business of our subsidiaries with international operations may be adversely affected by international business risks and fluctuations in currency exchange and translation rates.

          Approximately 63 per cent of our net revenues for fiscal year 2006 were attributable to our European and other non-U.S. operations, which include significant operations throughout Asia and Latin America, and approximately 37 per cent of our net revenues for fiscal year 2006 were attributable to our U.S. sales. In addition to our U.S. and European distribution subsidiaries, we have wholly owned distribution subsidiaries in Canada, Latin America (Mexico, Colombia and Peru) and Asia (Singapore, Hong Kong, China, Japan, Taiwan and Malaysia). In March 2006, we purchased the minority partner interest in our Japanese joint venture and we now own 100 per cent of our Japanese subsidiary. We have manufacturing subsidiaries in Belgium, Eastern Europe (Hungry and Slovakia) and India. We are also a partner in joint ventures in Latin America (Brazil, Argentina and Uruguay) and Asia (South Korea and India). Our operations may be affected by economic, political, social and governmental conditions in the

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countries where we have manufacturing facilities or where our products are sold. In addition, our operations could be adversely impacted by unfavourable exchange rates, new or additional currency or exchange controls, expropriation or other restrictions.

          Our financial condition and results of operations may be adversely affected by fluctuations in the value of the U.S. dollar compared to the euro and other currencies. We face foreign currency transaction risks. In fiscal years 2004, 2005 and 2006, 59.8 per cent, 61.8 per cent and 62.5 per cent, respectively, of our revenues were denominated in currencies other than the U.S. dollar. Because we report our financial results in U.S. dollars, we also face a currency translation risk to the extent that the assets, liabilities, revenues and expenses of our subsidiaries and joint ventures are denominated in currencies other than the U.S. dollar. Each of those subsidiaries operates using the functional currency of the country in which it is located. During fiscal years 2004 and 2005, our results of operations were positively impacted by the strengthening of the euro and other foreign currencies relative to the U.S. dollar. While exchange rate fluctuations over the past several years have been to our benefit, future material fluctuations in the exchange rates of foreign currencies relative to the U.S. dollar could have a material adverse effect upon our business, financial condition or results of operations.

Any material weaknesses in our internal control over financial reporting could result in a misstatement in our financial statements.

          Our Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of our disclosure controls and procedures and concluded that, as of January 31, 2006, we did not maintain effective internal controls over financial reporting because of a material weakness in our internal controls over accounting for income taxes, including the calculation of deferred tax asset valuation allowances, which resulted in us having to restate our consolidated financial statements for fiscal years 2003, 2004 and 2005. Because of the material weakness, management concluded that disclosure controls were not effective as of January 31, 2006. To remediate the material weakness in controls over our accounting for income taxes, we have engaged an independent registered public accounting firm (other than our auditors, KPMG LLP) to perform an analysis of our internal controls over accounting for and disclosure of income taxes and expect to implement recommendations that result from such analysis. Any material weaknesses in our internal control over financial reporting or our failure to remediate such material weaknesses could result in a misstatement in our financial statements not being prevented or detected and could adversely affect investor confidence in the accuracy and completeness of our financial statements, as well as our stock price.

Our business may be adversely affected if we encounter complications in connection with our implementation of SAP information management software.

          We are in the process of replacing all of our various business information systems worldwide with the SAP Enterprise Resource Planning (ERP) system. The pilot implementation begins in June 2006, and we expect implementation of the entire system to be completed in the first quarter of 2008. Any delay in the implementation of, or disruption in the transition to our new or enhanced systems, procedures or controls, could harm our ability to accurately forecast sales demand, manage our supply chain, achieve accuracy in the conversion of electronic data and records and to report financial and management information on a timely and accurate basis. Failure to properly or adequately address these issues could result in the diversion of management's attention and resources, and impact our ability to manage our business and our results of operations.

We have plans to relocate certain of our management functions to the United Kingdom. Such relocation, if not structured in an appropriate manner, could lead to material adverse tax consequences for the group.

          We have plans to relocate a number of our executive officers and other senior management, together with certain of our management functions, to the United Kingdom. We are seeking to reorganise ourselves in a manner that will not cause us to become tax resident in the United Kingdom or to have a permanent establishment there for U.K. tax purposes. We have commenced discussions with the U.K. tax authorities on the appropriateness of our conclusions in this regard. While we believe that we are structuring our management functions in a way that achieves our objectives, there can be no assurance that we will succeed in doing so, or that the U.K. tax authorities will agree with our approach. Should we not succeed in structuring our affairs so as not to become tax resident in the United Kingdom and so as not to have a permanent establishment there, or should the U.K. tax authorities disagree with

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our approach, it is our intention to seek alternative solutions in relation to the location and structure of our management functions. The inability to implement this transition without becoming resident or having a permanent establishment in the United Kingdom could have material adverse tax consequences for us.

If interest rates rise, our operating results may decline due to higher borrowing costs.

          We have €100 million of senior floating rate notes outstanding, which bear an interest rate of Euribor plus 4.375 per cent (6.848 per cent as of January 31, 2006). In addition, our senior revolving credit facility and the short-term credit lines that we use from time to time to finance our European operations are floating rate obligations. As of January 31, 2006, we had borrowings under short-term credit lines of $9.4 million and no borrowings under our senior revolving credit facility. These amounts may vary from time to time throughout the year as our business needs fluctuate. If interest rates rise, our interest expense will increase and our operating results will be adversely affected.

We have a leveraged capital structure which could adversely affect our financial health, our ability to service our indebtedness and to grow our business.

          As of January 31, 2006 we had total indebtedness of $307.2 million and a stockholders' deficit of $51.2 million. Our substantial debt could have consequences to security holders, including:

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it could make it more difficult for us to satisfy our obligations on our public debt securities;



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it may require us to dedicate a substantial portion of our cash flow from operations to the payment of principal and interest on our indebtedness, which would reduce the cash flow available to us for operations, working capital, capital expenditures, acquisitions and general corporate purposes;



•

it may limit our ability to obtain additional financing for working capital, capital expenditures, product development and general corporate purposes;



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it may make us more vulnerable in the event of a downturn in general economic conditions or in our industry; and



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it may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage to less-leveraged competitors.

          There can be no assurance that our cash flow and capital resources will be sufficient for us to make payments on our indebtedness or meet our other obligations in the future. If our cash flow and other capital resources are insufficient, we may be forced to reduce or delay capital expenditures, sell assets, try to obtain additional equity capital or refinance or restructure our debt, which among other things could potentially impair our growth strategy. There can be no assurance that any of those alternatives would be successful or allow us to meet our scheduled obligations in the future.

We are subject to restrictive covenants imposed by our existing credit facility, by the indentures governing notes we have issued and by an agreement we are party to with the Pension Benefit Guaranty Corporation.

          We completed a recapitalisation to improve our capital structure on July 31, 2003. This recapitalisation included, among other things, the entry by us into a $60 million revolving credit facility with General Electric Capital Corporation, or GE Capital, KBC Bank N.V. and certain other lenders. This credit facility contains customary financial and operating covenants, including, among other things, restrictions on our ability to pay dividends, incur indebtedness, merge, consolidate or transfer all or substantially all of our assets, make certain sales of assets, make investments, make capital expenditures, create, incur or permit the existence of certain liens, and engage in certain transactions with subsidiaries and affiliates. In addition, it requires us to achieve and maintain certain financial ratios. Such covenants will affect our operating flexibility and may require us to seek the consent of the lenders to certain transactions that we may wish to carry out. The failure to comply with the covenants would result in a default and permit the lenders under our credit facility to accelerate the maturity of the indebtedness issued thereunder.

          The indentures governing the terms of notes we have issued contain numerous financial and operating covenants that, among other things, limit our and our subsidiaries' ability to make certain payments and investments, including dividend payments, incur additional indebtedness or repay indebtedness, repurchase or redeem our shares, create liens or other encumbrances, sell or otherwise

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dispose of assets, merge or consolidate with other entities or engage in certain transactions with subsidiaries and affiliates.

          Agreements governing future indebtedness could also contain significant financial and operating restrictions. A failure to comply with the obligations contained in our indentures could result in an event of default under the indentures, which could permit acceleration of the notes and acceleration of debt under other instruments that may contain cross-acceleration or cross-default provisions. We are not certain whether we would have, or be able to obtain, sufficient funds to make these accelerated payments.

          We are also party to an agreement with the Pension Benefit Guaranty Corporation, or PBGC, pursuant to which we have granted to PBGC an equal and ratable lien in an amount of $17.3 million in the assets pledged as security under our credit facility referred to above. We have also agreed not to transfer any of our assets held in the United States to any of our subsidiaries or other businesses outside of the United States (other than in the ordinary course of business) for the term of the agreement.

We have significant underfunded and unfunded U.S. pensions and post-retirement obligations, which could adversely affect our liquidity.

          Our U.S. defined benefit pension plan is significantly underfunded. As is typical, our U.S. retiree medical plans are unfunded. Pension contributions and payments under our retiree medical plans required to be made by us may decrease our available cash. In addition, accounting rule changes have been proposed that would, if adopted, have the effect of increasing the amount of the underfunding that we are required to take into account as a liability on our financial statements.

The indentures governing our senior and senior subordinated notes contain change of control provisions that could discourage a proposal for a takeover of us.

          The indentures governing our senior and senior subordinated notes provide that, upon a change of control (as defined in each of the indentures), we will be required to make an offer to purchase all outstanding notes at a price equal to 101 per cent of the principal amount thereof plus accrued and unpaid interest thereon to the purchase date. As of January 31, 2006, the principal amount outstanding under our senior and senior subordinated notes was $121.5 million and $174.9 million, respectively. The occurrence of certain of the events that would constitute a change of control would constitute a default under our credit facility and might constitute a default under our other indebtedness. In addition, our credit facility prohibits the purchase of the notes by us in the event of a change of control unless and until such time as the indebtedness under our credit facility is repaid in full. In the event of a change of control, there can be no assurance that we would have sufficient assets to satisfy all of our obligations under our credit facility and the notes.

We are a U.S. company that is not subject to a significant amount of English legislation, rules, guidelines and codes of conduct, including the Combined Code and the City Code on Takeovers and Mergers.

          We are a company incorporated in and subject to the laws of the State of Delaware in the United States. Accordingly, a significant amount of English legislation, rules, guidelines and code of conduct that regulate the operation of English companies does not apply to us. The laws of the State of Delaware apply to us and, as a company with shares and debt instruments registered with the SEC, we are subject to the reporting requirements of the U.S. Securities Exchange Act of 1934, or the Exchange Act. These laws provide for mechanisms and procedures that would not otherwise apply to English companies.

          While we are not currently in compliance with all of the corporate governance principles set out in the Combined Code, subject to the corporate governance principles applicable to Delaware incorporated companies, we are committed to moving over time to a position of substantial compliance with the Combined Code. However, there can be no assurance that we will be able to move to such a position, in particular as we will remain subject to the corporate governance principles applicable to Delaware incorporated companies which may not in all circumstances be consistent with the corporate governance principles set out in the Combined Code. In addition, our ability to constitute a Board whose composition is compliant with the recommendations of the Combined Code is subject to compliance by us with our agreement with our Major Stockholders to include certain nominees of our Major Stockholders for election to our Board of Directors.

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          Transactions in shares of our capital stock are not subject to the provisions of the City Code on Takeovers and Mergers ("the U.K. Takeover Code"). We plan to attempt to afford to our stockholders certain provisions similar to Rule 9 of the U.K. Takeover Code, subject to certain carve-outs and limitations, by amending our certificate of incorporation prior to (and conditional upon) Admission to include provisions which will seek to impose a requirement on stockholders to make a mandatory offer in circumstances where it would be required under Rule 9. In addition, we expect to amend our certificate of incorporation prior to (and conditional upon) Admission to include a requirement that a stockholder or other person with an interest in our shares who is served with a disclosure notice by us must provide information to enable us to establish the nature and extent of his or her interest in any of our shares. Such provisions will be subject to the DGCL and applicable Delaware law. The DGCL and Delaware law do not contain any requirement for stockholders who acquire a certain level of the voting stock of a Delaware company to make a mandatory offer for the company in the way that Rule 9 of the U.K. Takeover Code requires, nor do they oblige stockholders to disclose their interests in a Delaware company in the same way as stockholders of an English company governed by the U.K. Companies Act are required to do. In addition, a majority of our Board of Directors may determine not to apply or enforce the provisions that will seek to impose a requirement to make a mandatory offer and the provisions that will require stockholders to provide us with information on their holdings. There can be no assurance that these provisions, if adopted, would be enforced or upheld by a U.S. court in all respects or, if enforced, that a U.S. court would construe these provisions in the same way as an English court or the Panel on Takeovers and Mergers in the United Kingdom would.

Risks Related to the Global Offering

If an active trading market for the Shares does not develop, the price of the Shares may suffer and may decline below the offer price, and it may be difficult for investors to sell their Shares.

          Our Shares were delisted from the Nasdaq Stock Market in 2002 after we ceased to meet their ongoing listing requirements because of a decline in our share price. Since 2002, there has been a limited public market for our Shares. Our Shares are traded in the United States in interdealer and over-the-counter transactions, and price quotations are available in the "pink sheets" under the symbol "SAMC.OB". Price quotations are also available on the Over-The-Counter Bulletin Board in the United States. Daily trading volume in our Shares averaged approximately 278,747 Shares during 2005.

          Although we intend to apply to have the Shares admitted to the Official List of the UK Listing Authority and to trading on the London Stock Exchange and it is expected that these applications will be approved, we can give no assurance that an active trading market for our Shares will develop or, if developed, be sustained following the global offering. If you purchase Shares in the global offering, you will pay a price that was not set in the existing limited public trading market. Instead, the initial offering price will be determined by us, the Major Stockholders and the underwriters following a bookbuilding process. Among the factors to be considered in determining the offer price, in addition to prevailing market conditions, will be our historical performance, estimates of our business potential and earnings prospects, an assessment of our management and consideration of the above factors in relation to the market valuation of companies in related businesses. If an active or liquid trading market for the Shares does not develop, investors may have difficulty selling their Shares quickly, or at all.

The trading price of our Shares could be extremely volatile.

          In recent years, the stock market has experienced extreme price and volume fluctuations. In particular, the market prices of securities of companies with a limited prior trading history have been extremely volatile. This volatility has affected the market prices of securities of companies for reasons frequently unrelated or disproportionate to the operating performance of such companies. The market price at which our Shares trade has in the past and may in the future fluctuate significantly in response to a number of factors, some specific to the us and our operations and some which may affect the markets in which we, or quoted companies generally, operate including:

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our historical and anticipated results of operations;



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large purchases and sales of our shares;



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announcements of innovations or new products by us or our competitors;



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changes in financial estimates by securities analysts regarding us, our industry or our competitors;

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conditions and trends in the industries in which we or our competitors compete;



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the occurrence of any of the risks described in this document;



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the timing, size and nature of other offerings that may be outstanding or forthcoming on the London Stock Exchange or other equity markets;



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legislative or regulatory changes affecting our operations; and



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general market and economic conditions.

          Due to these factors, you may not be able to sell your shares of our common stock at or above the price you paid, which could result in you incurring substantial investment losses.

Future sales or issuances of our Shares could adversely affect the trading price of our Shares.

          Following the global offering, Ares, Bain Capital and OTPP, our three Major Stockholders, will hold             per cent,             per cent and              per cent, respectively, of our Shares. Our Major Stockholders will agree, save with the prior consent of the joint global coordinators, and subject to certain exceptions, not to dispose of their Shares for a period of 180 days following Admission. We will agree, save with the prior consent of the joint global coordinators, and subject to certain exceptions, not to issue further Shares, other than pursuant to the exercise of share options and in certain other limited circumstances, for a period of 180 days following Admission. Sales by us or our Major Stockholders of a substantial number of our Shares in the public markets following the expiration of these lock-up periods, or the perception that these sales might occur, could cause the market price of our Shares to decline or could impair our ability to raise capital through a future sale of, or pay for acquisitions using, our equity securities. All of the Shares sold in the global offering will be freely transferable, except for any Shares acquired by our "affiliates" (as that term is defined in Rule 144 under the U.S. Securities Act of 1933, or the Securities Act), which are subject to certain restrictions under the Securities Act. Nevertheless, we have granted our Major Stockholders and certain executives the right to require us, subject to certain conditions, to register their Shares under the Securities Act for sale into the public markets. Upon the effectiveness of such a registration statement, all Shares covered by the registration statement will also be freely transferable.

Investors in the global offering will suffer immediate and substantial dilution.

          The offer price of our Shares is substantially higher than the net tangible book value per Share outstanding immediately after the global offering. Our net tangible book value per Share as of January 31, 2006, was approximately $             . Net tangible book value per Share as of January 31, 2006 represents the amount of our total tangible assets minus our total liabilities, divided by the number of Shares that were outstanding on January 31, 2006. Investors who purchase our Shares in the global offering will pay a price per Share that substantially exceeds the net tangible book value per Share. If you purchase our Shares in the global offering, you will experience immediate and substantial dilution of $             in the net tangible book value per Share of our Shares, based upon an assumed offer price of              pence per Share, which is the mid-point of the offer price range. Additional dilution will occur if we issue additional Shares. For more information, see "Dilution" set forth in Part XI of this document.

Future issuances of our Shares, including pursuant to our stock option plans, could dilute your voting power and may reduce our earnings per Share.

          After completion of the global offering, there will be             Shares outstanding. In the case of an increase in the amount of our equity securities, we expect, conditional upon Admission, to adopt provisions in our certificate of incorporation under which our stockholders will be entitled to pre-emptive rights to purchase certain additional Shares to be issued by us unless waived by an affirmative vote of the holders of at least 75 per cent of our Shares entitled to vote and represented at a meeting of our stockholders (at which a quorum is present) called for such purpose. These provisions will not apply to any issue of new securities which do not have rights to participate fully in a distribution of dividends or returns on liquidation, are issued pursuant to an employee stock option plan, or comprise rights to subscribe for such securities. As of April 30, 2006, there were             Shares issuable pursuant to deferred compensation awards and             additional Shares reserved for issuance pursuant to employee benefit plans.

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          Notwithstanding the expected grant upon Admission to our stockholders of pre-emptive rights in relation to new issues by us of equity securities, certain holders of our Shares may not be able to exercise their pre-emptive rights unless we have complied with the relevant securities laws of the jurisdiction in which such holders are located. In the case of U.S. stockholders, we will need to file a registration statement under the Securities Act, which is effective with respect to such rights, or there will need to be available an exemption from the registration requirements thereunder. We intend to evaluate at the time of any rights offering the costs and potential liabilities associated with compliance with foreign securities laws, as well as the indirect benefits to us of thereby enabling the exercise by holders of our Shares of their pre-emptive rights. No assurance can be given that we will choose to comply with the requirements of the securities laws of every jurisdiction where our stockholders are located. If we choose not to comply with the securities laws of any particular jurisdiction, we will not be able to offer pre-emptive rights to holders of our Shares who are located in such jurisdiction.

We cannot assure investors that we will make dividend payments in the future.

          We have not declared any cash dividends on our Shares and do not currently anticipate paying cash dividends in the foreseeable future. The terms of our credit facility and our outstanding senior notes and senior subordinated notes limit our ability to pay dividends on the Shares. In addition, any determination to pay dividends in the future will be at the discretion of our board of directors and will depend upon our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors that our board or directors deems relevant.

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PART III: INDUSTRY

          The statistics and projections in this section have been published by Global Industry Analysts, Inc., or GIA, an independent research organisation. The historical data was compiled from a variety of primary and secondary sources, including surveys of market participants. The primary and secondary research was completed over a four month period in 2005, and involved sending questionnaires to targeted marketing and sales executives worldwide, as well as sending detailed and focused letters to senior management, particularly those operating in markets that are not well reported on. All data from and including 2005 onwards is projected data, which has been prepared by GIA on the basis of the historical data.

          A number of additional characteristics of GIA's published data should be taken into account. These include the fact that its product segment categories are not the same as those used by us; all of its sales figures are at the retail level, whereas most of our sales figures are not; GIA's historic data for the period from 2001 to 2004 and its projected data for the period from 2005 to 2010 has all been translated by GIA into U.S. dollars according to currency values as of July 1, 2005; GIA's historic data for the period from 1991 to 2000 has not been standardised to any base year currency values; GIA's projections do not take into account future foreign exchange rate movements; and none of the GIA data for the period from 2001 onwards has been adjusted for inflation, nor do its projections make any adjustments for inflation.

          We confirm that the information provided by GIA and other third parties has been accurately reproduced and so far as we are aware and have been able to ascertain from information published by those third parties, no facts have been omitted that would render the reproduced information inaccurate or misleading. Nonetheless, in light of the absence of publicly available information on a significant proportion of participants in the industry, many of whom are small and/or privately owned operators, the data on market sizes and projected growth rates should be viewed with caution. Additional factors which should be considered in assessing the usefulness of this data and in particular projected growth rates include: the fragmentation of the market; the fact that different market participants define the market or categorise product segments differently; the fact that developments in the industry are heavily dependent upon macroeconomic developments across many regions, and are susceptible to disruptions caused by wars, terrorist activities and other events that are not predictable and are outside the control of market participants; the fact that historical trends are significantly affected by the industry disruptions caused by the effects of the September 11, 2001 terrorist attacks in the United States; and a number of other factors described elsewhere in this document, including those set out in the section headed "Risk Factors" in Part II of this document. All of these factors limit the usefulness of the statistics and projections in this section.

Luggage Market

          According to a report prepared by GIA in October 2005, referred to herein as the GIA report, the global retail bag and luggage market was estimated at $20.8 billion in 2004 and is projected to reach $27.0 billion by 2010. During the period from 1991 to 2000, the global retail bag and luggage market grew from $12.9 billion to $19.4 billion, equating to a compound annual growth rate, or CAGR, of 4.6 per cent. During the period from 2000 to 2003, the global retail bag and luggage market grew from $19.4 billion to $20.3 billion, equating to a CAGR of 1.5 per cent. Assuming the global retail bag and luggage market reaches $27.0 billion by 2010 as the GIA report projects, that would equate to a CAGR of 4.2 per cent during the period from 2003 to 2010. The GIA report therefore shows that, aside from the period between 2000 and 2003, the global retail bag and luggage market has shown and is expected to show a CAGR of between 4.2 per cent and 4.6 per cent. The slow growth over the period from 2000 to 2003 was mainly due to the adverse effect the September 11, 2001 events had on the travel industry and a general economic downturn. Travel and tourism are the primary drivers of luggage sales and, accordingly, regional and global luggage sales correlate favourably to the relative trend in airline and other forms of travel. According to the GIA report, this connection between the travel and luggage industries signifies that almost any event that affects the travel industry, such as terrorist attacks, armed conflict, epidemics and poor economic conditions, equally affects the luggage industry. During 2004 and 2005, the luggage industry began to grow once more as tourism and business travel increased.

          The luggage industry is sub-divided into a number of categories, with products generally manufactured from either leather, textiles, metals, plastics or a combination of these materials.

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Suitcases / Pullmans — Suitcases, also known as pullmans, are usually offered in sizes from 24 inches to 36 inches in soft-sided, semi-soft and hard-sided structures. This category has seen

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a shift from hard-sided luggage to soft-sided hybrids and semi-soft luggage cases as consumers have demanded a combination of lightness, content protection, and durability.

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Garment Bags and Carriers — Garment bags are designed to carry one to two garments on hangers while garment carriers are larger, and are usually able to hold three or four garments on hangers. Although less popular than wheeled suitcases and carry-ons, this category continues to represent a significant portion of the product mix.



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Totes and Casual Bags — Totes are usually relatively small casual bags made from fabric or leather, with shoulder straps, zippers and expandable bottoms. These bags are most commonly sold as accessory pieces within a larger luggage collection.



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Carry-ons — Carry-ons are small suitcases in various sizes less than 22 inches. They can be hard-sided, soft-sided or semi-soft and can be taken onto planes and stored under seats or in overhead lockers.



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Business Bags and Cases — Business bags range from conventional leather briefcases to soft bags and laptop cases. Business cases are generally larger and are often described as "mobile offices". These bags are predominantly made from vinyl, fabric or leather. Novel backpacks, and briefcases that can be converted into backpacks, have replaced conventional brown-coloured leather briefcases among many consumers.



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Sports Bags — Sport bags are usually large bags, with functionality specific to their usage. This category is comparatively price inelastic with consumer preferences being weighted on greater functionality and additional carrying load.



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Backpacks — Backpacks are available in a variety of sizes, designs and colours. As mobility and comfort are the key requirements for backpacks, there has been a gradual shift in market demand towards lighter and smaller bags. Backpacks on wheels include long pullout handles, and are popular among school-going kids.



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Daypacks — Daypacks are well-organised products with a fashionable look, and provide additional features such as detachable computer cases and organisers. The global market has seen a shift in demand towards smaller or lightweight bags.

          The table below sets out the percentage breakdown of global luggage sales by product category in 2004.

Source: GIA report

          Across all product categories, the weight of the bag is a key feature that consumers consider, with the majority favouring lightweight bags.

Geographical Markets

          According to the GIA report, the United States (sales of $7.8 billion in 2004) and Europe (sales of $7.1 billion in 2004) are the two largest markets for luggage, together accounting for 72 per cent of total luggage sales. The U.S. market is expected to grow at a CAGR of 4.0 per cent in the period from 2005 to 2010, reaching $9.9 billion in 2010. The European market is projected to grow at a faster pace than the U.S. market with a CAGR of 4.5 per cent in the period from 2005 to 2010, reaching $9.2 billion in 2010. Their combined share of the global market is expected to slightly decrease to 71 per cent of total luggage sales in 2010.

          The Asia Pacific region ($1.5 billion excluding Japan) is expected to experience the greatest future growth, with expected CAGR of 10.5 per cent in the period from 2005 to 2010 driven by a growing

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population, an improved economic environment and rapidly increasing disposable incomes. In terms of value this translates into $2.6 billion by 2010, from an estimated $1.5 billion in 2005.

          The table below sets out the percentage breakdown of global luggage sales by region in 2004.

Source: GIA report

Competition

          The global luggage market is highly competitive and fragmented, with a large number of participants in all segments and subcategories. Unlike Samsonite, most players are private companies with a strong regional focus. Due to the relatively low capital intensity of the industry, barriers to entry are relatively low. Competitive advantage is represented by brand strength and recognition, product quality, design and price, product differentiation and innovation, distribution capabilities and customer service. These factors are important for successful brand development on a global scale.

United States

          The U.S. market is highly fragmented, with several smaller companies competing for market share with the more established firms. The luggage market in the United States is highly correlated to broader travel trends, especially air travel. According to the GIA report, Samsonite has the greatest volume of sales in the U.S. market, followed by Atlantic Luggage Co. Other major players include Jansport, Targus, Olivet, Ingear, Badanco, Tumi, Swiss Army, Eastpak and Travelpro.

          In recent years the U.S. market has seen a shift in consumer demand away from hard-sided luggage in favour of soft-sided and lighter weight luggage as well as hybrid luggage. U.S. manufacturers have increasingly looked abroad to source products to control costs and to benefit from price competitiveness. We believe that the U.S. market is primarily driven by price and features. While design has become increasingly important as consumers have become more style conscious regarding their luggage, we believe that product innovation towards greater functionality remains the key determinant of products' commercial success in the U.S. market. According to the GIA report, rising disposable income and increased leisure travel from baby boomers as they begin retirement are expected to drive growth in the U.S. market. Sub-categories such as lightweight and easily transportable luggage, and casual lifestyle lines, are expected to experience particularly strong growth.

Europe

          The European market is highly fragmented, with both local and national players in most of the countries with large markets. Both business and personal travel are expected to remain the main growth drivers for the luggage industry. According to a report by GFK Custom Research, Samsonite is a market leader in France, Germany and the United Kingdom. Other major players in Europe include Antler, Delsey, Roncato, Stratic, Rimova, Eastpak, Targus and Jansport.

          Luggage prices are expected to face increased pressure over the coming years, driven by cheaper imports and improved manufacturing technologies. The increasing demand for lifestyle products such as computer cases, sports bags and backpacks in Europe is leading to a shift from hard-sided luggage to soft-sided luggage and casual bag products. European consumers also favour lighter weight well-featured luggage. We believe that product development is an important element in the European market for luggage, and as a result manufacturers are introducing portable and lightweight luggage. According to the GIA report, increased leisure travel across the major European countries due to rising disposable income is also likely to have a positive impact on the travel industry.

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Asia

          The Asian market is fragmented, with few large players and several local newcomers. Major players in the Asian market include ACE, Crown, Eminent, VIP and Mandarina Duck. In Asia, the largest product segment is suitcases, pullmans, casual bags and garment bags, accounting for 55 per cent of total sales in 2004, according to the GIA report. While Japan, India and China are the largest luggage customers in the Asian market, other key markets are South Korea, Hong Kong, Taiwan and Thailand.

          Almost 20 million Japanese citizens travel abroad each year and, accordingly, there is a strong demand for suitcases and pullmans. Compared to other regions, manufacturing in Japan is focused on the luxury segment and high quality products. Japan is also a significant market for imports, with strong demand for high-priced branded products from Europe, and strong demand for low-priced mass market products from China. Multinational companies have entered the Japanese market to capture the growing demand, with many opting for joint ventures and alliances to take advantage of local knowledge and retailer relationships. In India, a large portion of the luggage market consists of traditional low-cost stores and small companies which usually employ fewer than ten people, such as local corner shops. Recently, market growth has increased with the expansion of the tourism industry and the increased spending by Indians on travel due to growth in personal income. China offers a wide range of luggage, mostly made from leather and other soft materials. Many international firms have been outsourcing manufacturing of soft-sided cases to China, but there are a growing number of domestic Chinese luggage manufacturers establishing independent labels aiming to compete on the global market.

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PART IV: OUR BUSINESS

General

          We are one of the world's largest and most recognised designers and distributors in the luggage industry, as well as one of the leading distributors of business, computer, outdoor, and casual bags. We sell our products under a number of well-known brand names, primarily Samsonite® Black Label, Samsonite®, and American Tourister®, and licensed brand names such as Lacoste®. We also intend to start distributing licensed Timberland® products in fiscal year 2007. With net sales of $966.9 million for fiscal year 2006, an increase of approximately 7.1 per cent from the preceding fiscal year, we are the leader in the global luggage industry and significantly larger than any of our regional competitors. Our net sales for fiscal year 2005 were $902.9 million and our net sales for fiscal year 2004 were $776.5 million. Our compound annual growth rate, or CAGR, on sales since fiscal year 2003 is 8.7 per cent. In fiscal year 2006, we had consolidated net income before preferred stock dividends of $13.3 million, compared to a loss of $9.7 million before preferred stock dividends in fiscal year 2005 and net income of $2.8 million before preferred stock dividends in fiscal year 2004. In fiscal year 2006, we had a net loss to common stockholders (after preferred stock dividends) of $1.5 million compared to a net loss to common stockholders of $23.4 million and $28.3 million in fiscal years 2005 and 2004, respectively.

          Our product assortment includes product lines appealing to a broad range of consumers, from those focused on luxury under the Samsonite® Black Label product lines; quality, functionality and durability under the Samsonite® lines; or value-consciousness under the American Tourister® brand. In addition to using our Samsonite® and American Tourister® brand names on the products we manufacture or distribute, we license these brand names to third parties for use on products that include travel accessories, leather goods, furniture and other products.

          Our products are sold in more than 100 countries at various types of retail establishments, including department stores, high street shops and luggage specialty stores, mass merchants, warehouse clubs, computer and electronic superstores, office superstores, bookstores, and travel product stores. We also sell certain products through 284 Samsonite-operated retail stores in North America, Europe, Asia and Latin America, over 150 shop-in-shop corners principally in Asia and 173 franchised retail stores, principally in India and South Korea. In addition, our products are sold through www.samsonitecompanystores.com, www.samsoniteblacklabel.com and the websites of many of our customers. We design the majority of our luggage products at our facilities in Europe, North America and Asia. Our products are produced by carefully selected third party suppliers or Samsonite-operated manufacturing facilities. Sales in Europe, North America and in our other markets (including Asia and Latin America) comprised 43.2 per cent, 37.6 per cent and 17.5 per cent of our net sales, respectively, in fiscal year 2006. Licensing revenues comprised the remaining 1.7 per cent of total revenues. We were incorporated in Delaware in 1987.

Key Strengths

Premier Global Brand Franchise in a Leading Industry Position

          Complementary Portfolio of Strong, Well-Known Brands.    We are one of the world's largest and most recognised designers and distributors of luggage, and have a strong heritage in the luggage market dating back to 1910. We believe that our leading market position is primarily the result of our portfolio of complementary products, well-known brand names, strong product offerings and global distribution and sourcing capabilities.

          Recent surveys indicate that we enjoy a very strong worldwide brand awareness. We believe that consumers are familiar with our products and are loyal to our brands. Primarily, we market our luggage products under the brand names Samsonite® Black Label, Samsonite® and American Tourister®. Our products and brands serve multiple markets from Samsonite® Black Label for the luxury market to American Tourister® for the value consumer. We also market products under a license agreement with Lacoste® and will start marketing products under a license agreement with Timberland® in fiscal year 2007.

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          Worldwide Distribution and Industry Leading Position.    We distribute our products in more than 100 countries. The success of our Company, products and brands is reflected by the following measurements:

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We believe we are a leader in total luggage sales in Europe, with our products comprising approximately 21.6 per cent of total luggage sales (including hardside luggage, softside luggage and garment bags).



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We believe we are a leader in total luggage sales in the United States, where we estimate that our products comprised approximately 26.7 per cent of total luggage sales (consisting of hardside luggage, softside luggage and garment bags).



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We believe we have strong luggage sales in the Asia Pacific region, where we estimate that our products comprised approximately 24.5 per cent of sales of hardside luggage, softside luggage, garment bags and casual bags.

          The data in "Worldwide Distribution and Industry Leading Position" is extrapolated from third-party sources, including a report by GIA, as well as our internal records. For a discussion of the characteristics of GIA's published data, see the italicised language in "Industry" set out in Part III of this document. We have made the following adjustments in order to present the information in the bullet points above. First, GIA defines luggage sales to include the sale of hardside luggage, softside luggage, garment bags and casual bags. We do not claim to be a sales leader in the casual bag market, and our analysis of luggage sales in Europe and the United States excludes casual bag sales based on estimates from other third party sources and using assumptions similar to those of the GIA report about the growth rate of casual bag sales in these regions. However, our statement about market share in the Asia Pacific region does include information about casual bag sales, as we do not have the third-party data about casual bag sales growth in the Asia Pacific region to extract from the luggage market as a whole. Second, the GIA study calculates luggage sales at the retail level only. We calculate our luggage sales at both retail and wholesale levels, deriving an estimate of the retail value of our total luggage sales based on our estimate of the retail mark-up in each region discussed, and adding the sales of luggage through our own retail outlets. Third, calculations of our total European sales includes Russia, the Middle East, and parts of Northern Africa. The GIA study reports Russia and the Middle East separately, and does not provide data on parts of Northern Africa. We believe that the sales derived from Russia, the Middle East, and parts of Northern Africa do not comprise more than 10 per cent of our total European sales. The GIA study also includes India in their estimates of the Asia Pacific region, which we report separately.

          Leading Global Brand Awareness Fuelled By Increasing Marketing and Advertising.    To further strengthen and support our brand, we commit substantial resources to advertising and marketing programs that promote the style, features, durability and quality of our products and direct the marketing of our products based on consumer demographics. Over the last three years, we have increased the absolute value of our marketing and advertising spending behind our brand by 67.4 per cent to reach 7.3 per cent of our sales. The success of our Company, products and brand support programs is reflected by the following measurements:

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A Company-sponsored survey completed in September 2002, by Hall and Partners, a U.S. independent surveying organisation, indicated that approximately 95 per cent and 88 per cent of travellers surveyed in the United States recognised the Samsonite® and American Tourister® brand names, respectively, compared to approximately 66 per cent for the next most recognised luggage brand.



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Similar market surveys performed in Europe by Research International and Hall and Partners show that recognition of the Samsonite® brand name in most major Western European countries ranges from 62 per cent to 96 per cent.

Strong Growth Prospects

          We Operate in a Dynamic Industry.    According to the GIA report, the global retail bag and luggage market was estimated at $20.8 billion in 2004 and is projected to reach $27.0 billion by 2010. During the period from 1991 to 2000, the global retail bag and luggage market grew from $12.9 billion to $19.4 billion, equating to a compound annual growth rate, or CAGR, of 4.6 per cent. During the period from 2000 to 2003, the global retail bag and luggage market grew from $19.4 billion to $20.3 billion, equating to a CAGR of 1.5 per cent. Assuming the global retail bag and luggage market reaches

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$27.0 billion by 2010 as GIA projects, that would equate to a CAGR of 4.2 per cent during the period from 2003 to 2010.

          Diversified and Steady Revenue Stream.    Our revenues are diversified across multiple geographic markets, distribution channels and consumer segments. Our products are sold in over 100 countries in Europe, North America, Asia and Latin America, with our largest customer accounting for 3.3 per cent of our consolidated revenues. Sales in our other markets (including Asia and Latin America) accounted for 13.3 per cent of our total sales in fiscal year 2004, 15.0 per cent of our total sales in fiscal year 2005 and 17.5 per cent in fiscal year 2006. Our growth in these regions is consistent with the general growth profile of these regions, and enables us to further balance our revenues geographically. We sell a broad range of luggage products, including suitcases, garment bags, and carry-on bags, as well as non travel-related luggage products such as business and computer cases and casual bags and backpacks, through multiple distribution channels including Company-operated retail stores, department stores, mass merchants, specialty stores, warehouse clubs and office superstores. We sell our products at multiple price points and to many different consumer segments. For example, Samsonite® Black Label is sold to very affluent customers, Samsonite® to upper income and affluent consumers, American Tourister® to the middle-income and value-conscious segment, and Lacoste® to affluent customers. While sales in certain markets and products have suffered in recent years as a result of certain events such as the SARS outbreak and the war in Iraq, we believe that our product and geographic diversification provide a buffer to the Company's consolidated results against events which only affect certain markets.

          We are an Industry Leader in Product Innovation.    Many of today's most successful luggage products and features were introduced or popularised by Samsonite, including suitcases on wheels, suitcases with a built-in luggage cart, full-featured, structured garment bags, ultra-lightweight, softside suitcases, and innovative new wheel systems. Some of our innovations include:

•

pioneering the use of wheels on our suitcases in the 1970s;



•

introducing the three-point locking system and Piggyback, the first commercially successful upright luggage case in the 1980s;



•

EZ-Cart, the upright suitcase that can be pushed or pulled in the 1990s;



•

the lightweight F'Lite hybrid luggage and the softside Spinner, a four-wheel system featured in several product lines in the 2000s; and



•

X'Lite, a new generation of luggage made from a lightweight, hard-side material that our research and development team developed with a petrochemical manufacturer and a Belgian university research centre.

          We own approximately 110 U.S. patents and approximately 782 patents in selected countries other than the United States. In addition, we have approximately 323 patent applications pending worldwide. As of the end of fiscal year 2006, we had 1,988 trademark registrations with another 210 pending trademark registration applications worldwide covering luggage, travel equipment, apparel products and retail services.

Superior Operating Performance

          Effective Global Manufacturing and Sourcing Network.    Our global product-sourcing network consists of Samsonite-operated manufacturing facilities and various third party finished goods suppliers located principally in Asia and Eastern Europe. During fiscal year 2006, the Company achieved significant direct product cost reductions by moving the purchase of softside products from high labour cost to low labour cost countries and by volume bundling raw materials purchases such as plastics, fabrics and components such as locks, wheels and handle systems. In the past few years, we have consolidated our hardside manufacturing capacity into two manufacturing plants in Belgium and India, and we have consolidated our softside manufacturing capacity into two manufacturing plants in Hungary and Slovakia. As part of this process, we closed three manufacturing facilities (in the United States, Mexico and Spain) and sold our French factory in 2005. We have also created a centralised finished goods sourcing office in China, thus generating greater operating efficiency. Our global sourcing network enables us to obtain low production costs while maintaining the same high quality standards as are applied to the products we manufacture ourselves. Sourcing from third-party suppliers of our products comprises approximately 89.0 per cent of our needs, up from 77.0 per cent in fiscal year 2004, which has contributed to a more efficient and flexible manufacturing cost structure. These

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improvements in our sourcing strategy and cost structure and the increase in the size of our Company-operated retail and shop-in-shop operations, together with price increases we have implemented, have increased our gross margins from 44.8 per cent in fiscal year 2004 to 46.2 per cent in fiscal year 2005, and to 48.7 per cent in fiscal year 2006.

          Sustained and Reliable Cash Flow Generation.    Our Company has produced consistent operational cash flow over the last four years, even when external events have temporarily affected our sales results. The Company has increased its operational cash flow at a 53.9 per cent CAGR during the period from fiscal year 2002 to fiscal year 2006, even when sales results have decreased as they did in fiscal year 2002, as a result of the September 11, 2001 attacks. The growth in our sales and increased gross margins have driven a significant enhancement in our operating performance in fiscal year 2006. An aggressive working capital efficiency improvement program, initiated in fiscal year 2005, has produced a reduction in working capital (accounts receivable plus inventory less accounts payable) needs of approximately $22.7 million between fiscal year 2004 and fiscal year 2006, mostly as a result of improved management of vendor payment terms and SKU inventory reductions. We are committed to continuing to improve our working capital efficiency, which is a key metric in determining our management's variable compensation. Despite our retail expansion, our capital expenditure needs remain low, having averaged just 1.8 per cent of sales over the last three years.

Experienced and Incentivised Management Team.

          Strong Management.    Our senior management team reflects our global reach, consisting of representatives from five different countries. Some members of our senior management team have spent significant time at Samsonite and others have joined the Company more recently to complement and enhance its capabilities. Management is incentivised through a program of short-term and long-term incentives, implemented as of fiscal year 2005. The incentive programs include: (i) an annual incentive scheme linked to growth in sales, earnings before interest, tax, depreciation and amortisation, or EBITDA, and to improvements in working capital efficiency, and (ii) a long-term incentive scheme comprising of the holding of options to purchase our common stock. The team is led by our CEO, Marcello Bottoli, a luxury goods and consumer products veteran who joined the Company in March 2004. Mr. Bottoli was previously the President and CEO of Louis Vuitton, part of the LVMH group, and has significant experience growing and developing consumer products companies. Mr. Bottoli was also part of the executive senior management team at Reckitt Benckiser from 1991 to 2001, and held various positions with Boston Consulting Group and Procter & Gamble prior to 1991.

Business Development Strategies

          We are pursuing strategic initiatives that are designed to capitalise on our underlying business strengths, growing and diversifying our revenue stream, improving our profitability and our cash flow generation and enhancing the resiliency of our business. Key elements of our business development strategies include:

          Introducing a Stream of Innovative and Contemporary Products into the Market.    We aim to generate consumer-preferred products combining Samsonite's historical strengths in technical and functional innovation with contemporary and stylish design. To further this goal, we have hired a Creative Director from the luxury fashion accessory industry and have established a new global design studio in London. Among other elements, our strategy includes joint product development projects with designers from the fields of fashion, architecture and design, such as product designer Marc Newson and fashion designer Matthew Williamson.

          Strengthening Support Behind our Brand and Product Marketing and Advertising.    Our plans include continued growth in direct consumer advertising and marketing support programs for our trade customers. We are focusing our marketing programs on more effective targeted advertising, strengthened point-of-sale support and better customer service. We spend a large portion of our advertising budget on targeted print advertising campaigns and billboards. We recently began featuring business and fashion celebrities such as Sir Richard Branson and actress Isabella Rossellini in our advertising. We spent approximately $70.8 million on advertising and promotional costs in fiscal year 2006, which constituted 7.3 per cent of our net sales and was a 23.6 per cent increase over fiscal year 2005, and we expect to spend approximately $91.5 million in fiscal year 2007, which would be an increase of 29.2 per cent over fiscal year 2006.

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          Expanding our Retail Distribution Platform.    We plan to continue to increase the business importance of our retail operations. We intend to open additional retail locations and modify our retail business model to operate stores under three different platforms: Samsonite® Black Label, Samsonite® and Company factory outlets. Samsonite® Black Label stores will be located in large-market, fashion oriented international shopping districts in areas such as New York, London, Singapore and San Francisco, while we plan to open additional Samsonite® stores in high-traffic shopping malls and high street locations. Our Company factory outlets will sell primarily discontinued items in our collections. We believe that the expansion of our retail operations will enable us to better control the introduction, marketing and presentation of our Samsonite® Black Label and traditional Samsonite® product lines. We also believe this strategy will enhance our brand image and solidify our price-point positions at the higher ends of the luggage and casual bags market. This should in turn result in broader and more profitable distribution of our products both in our own stores and with our traditional wholesale customers.

          Pursuing Expansion Opportunities in High-Growth Geographic Markets.    We plan to continue to expand worldwide in countries where growing economies and reduced political and trade barriers provide opportunities for long-term growth. Our major region of focus will continue to be Asia, where, according to GIA, the projected growth rate for the combined Asia Pacific and Japanese luggage and casual bag market of 7.5 per cent from 2005 to 2010 will outpace all other major markets. We believe we are well-positioned to take advantage of this projected growth by virtue of our existing operations in the Asian markets, including China, India, the Pacific Rim and our recently established operations in Japan. Our Asian business unit has achieved a 18.9 per cent CAGR in net sales since the end of fiscal year 2003. In India we have also entered into "franchise" arrangements with over 140 retailers that enable us to assist our partners with store location, signage, and retail marketing in exchange for exclusive supply arrangements. Upon the expiration in 2004 of our license agreement in Japan with a local luggage manufacturer, we have re-entered the Japan market directly through a joint venture. We recently purchased the minority partner interest in the joint venture and now own 100 per cent of our Japanese subsidiary. We will also continue to pursue expansion opportunities in other markets, including in Eastern Europe or Latin America, either by directly entering these markets or by acquisitions or joint ventures with third-party distributors. We believe that these regions offer significant growth opportunities and, given our global manufacturing and brand presence, we are well positioned to increase sales and profitability in these regions.

          Exploiting New Business Opportunities.    We have a successful track record of leveraging our well-recognised brands to introduce new products and product extensions. We believe there is opportunity to expand our market share in the luxury market for travel products and will continue to expand Samsonite® Black Label and other luxury product lines such as X'Lite, Vintage, Signat, 1500 and 1800 Series, Samsonite® by Mark Newson, PRO-DLX and Hommage. We also believe there is an opportunity to reintroduce some of our more successful products, such as our re-edition of the Signat product line in fiscal year 2007. We will continue our focus on the growing outdoor and casual bag market and the business and computer case markets, which together comprised approximately 24.0 per cent of our sales in fiscal year 2006.

          We believe that there are other opportunities to license our brands beyond our current travel accessories, leather goods and furniture categories. In particular, we plan to explore the expansion of our business directly or through licenses to encompass new categories, such as eyewear and watches, where our branding could appeal to potential customers. We also plan to expand our presence in other product categories, such as shoes. We also intend to pursue additional licensing opportunities with recognised international consumer brands, such as our existing licenses with our Lacoste® and Timberland® products.

          Improving Our Gross Margins.    We plan to continue improving our gross margins by increasing our price levels as we introduce new consumer product lines to replace aging, lower-priced products, expanding our retail activities and improving our sourcing and coordinating certain raw material purchases by our suppliers to reduce the costs of our products. We intend to further optimise our supply chain and manufacturing operations, which will include reductions in company-operated manufacturing facilities and partnering with third-party vendors.

          Continuing to Improve Operating Efficiencies and Cash Flow Generation.    We will continue to focus on strategies to reduce fixed manufacturing and administrative costs, reduce inventory to more efficient levels, shorten product delivery lead times, and increase responsiveness to changes in the

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marketplace. We will also continue to focus on improving our working capital efficiencies, maintaining our high inventory turnover and receivable collection rates and building technical and development support to start co-development relationships with preferred finished goods vendors. The Company is committed to further increase the third party outsourcing to 95 per cent of total softside products with fewer vendors who fully support the co-development business model. Moreover, raw materials volume bundling will be increased considerably from 20 per cent to 50 per cent of the total raw materials purchases. Both first and second tier suppliers development will further enhance cost control and generate cost savings.

Products and Development

          We distribute a broad range of products that include softside, hardside and hybrid (combination hardside and softside) luggage, business and computer bags, and outdoor and casual bags, shoes, small leather good accessories and other related products.

          Below is our market positioning for each of our principal brands:

*

There are no historical sales of Timberland® licensed products. We expect to begin selling Timberland® licensed products in fiscal year 2007. Timberland has in the past sold products in the luggage and casual bags sector through a license agreement with another manufacturer, which has since terminated.

          Licensed Products.    We license our trademarks primarily for use on related product categories that are made and sold by licensees, either worldwide or in certain geographical regions. Our licensees are selected for competency in their product categories and usually sell parallel lines of products under their own or other brands. Examples of licensed products include leather business and computer cases, furniture products, travel accessories, photo and audio storage gear, personal leather goods, umbrellas, cellular phone cases, school bags, shoes and children's products. Net sales include royalties earned and sales of licenses of $16.6 million, $19.9 million and $22.0 million, for the years ended January 31, 2006, 2005 and 2004, respectively. For fiscal years 2005 and 2004 we had royalties of $4.9 million and $5.2 million, respectively from a luggage manufacturer and distributor in Japan. In December 2004, the license agreement with our Japanese distributor terminated and the Company initiated direct market sales in Japan.

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          The following table sets forth an overview of the percentage of our fiscal year 2006 revenues from global sales of luggage, business and computer cases, and outdoor and casual bags by product categories:

Note:

(1)

Subtotaled to reflect segments measured in October 2005 GIA report. See discussion of "Worldwide Distribution and Industry Leading Position" above.

          Our product categories are described below. See also "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part VII of this document.

          Softside Luggage.    The softside luggage category includes suitcases, garment bags and soft carry-on suitcases. Approximately 89.0 per cent of the softside luggage we sell is made for us by independent finished goods suppliers located around the world. We produce the balance of our softside luggage and garment bags in our own facilities located in Eastern Europe. Our softside products are sold under all of our major brands.

          Over the past few years, Samsonite has introduced a number of innovative proprietary features in its softside luggage products in response to consumer demands for increased ease of use and better interior organisation, mobility and protection. An example is the SpaceMaster carry-on/tote designed to fit easily in airline overhead bins or under seats.

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          Hardside Luggage.    We manufacture most of our hardside suitcases in Company-owned factories. Our hardside luggage is sold under the Samsonite®, Samsonite® Black Label and American Tourister® brands. Each line includes a variety of sizes and styles to suit differing travel requirements. We currently manufacture hardside suitcases using three basic processes: injection moulding, vacuum forming and pressure forming. Two of these processes require different types of plastic resin; the third uses proprietary, SRP (self-reinforcing polymer) laminates. Our hardside suitcases include proprietary features to facilitate ease of packing and transport.

          Hybrid Luggage.    We have introduced products that include important proprietary designs and features of both the hardside and softside luggage. Generally, hybrid cases use our various polymer-moulding technologies to form the structural, protective shell portion, with textile-based soft portions forming the rest of the product. Hardlite business cases and some F'lite travel products use our patented, proprietary process to mould sleek, tough polymer frames around laminated fabric panels to form extremely light shells.

          Business and Computer Cases.    We sell a variety of business and computer cases under our Samsonite®, Samsonite® Black Label and American Tourister® brand names. We are pursuing innovations in lighter weight and more fashionable styles meeting the functionality requirements of modern travellers. Our two latest introductions were a line of women's computer bags, a line of casual business cases and a mobile office computer bag with Spinner wheels. We design and have our suppliers manufacture our softside business cases and computer cases. In addition, we license our brands to experienced business case distributors for the sale of certain products in the United States.

          Outdoor and Casual Bags.    The outdoor and casual bag market includes duffel bags, casual luggage, tote bags, athletic bags, traditional backpacks, daypacks, and shoulder bags. We have expanded our business in this growing market by increasing distribution of products under our licensed Lacoste® brand. Additionally, the Company has licensed the Timberland® brand to extend its reach in the outdoor and casual bag markets and expects to begin distribution of Timberland® products in fiscal year 2007. We believe that by offering consumers a number of product lines with varying styles and price points, we have the opportunity to capture a larger portion of this market.

Regions and Store Locations

          Our products are sold in more than 100 countries around the world from the retail locations of others, from our own stores, over the Internet at www.samsonitecompanystores.com and www.samsoniteblacklabel.com in the United States and at the websites of a number of our customers. Retail channels of distribution primarily include department and specialty stores, national and mass merchant retailers, warehouse clubs and Company-operated retail stores.

          Sales of our products tend to be only moderately seasonal. Sales are slightly higher in the third and fourth quarters of fiscal years, when the back-to-school shopping season increases sales for backpack and casual products and when holiday travel and shopping increases sales for our traditional luggage products.

          A summary of net revenues follows:

          Europe.    Our Samsonite® and Samsonite® Black Label products in Europe are sold through specialty luggage and leather goods stores and department stores. We also sell our products through 45 Company-operated Samsonite® and Samsonite® Black Label retail stores located throughout Western and Central Europe. In order to preserve the premium image of the Samsonite® brand,

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Samsonite® brand products are not distributed through discount retailers. Our American Tourister® brand has been introduced in Europe as well as in Asia to establish a single global brand name in the discount channel (known in Europe as "hypermarkets"). Our direct sales and product demonstration force of approximately 130 people serves companies with retail outlets throughout Europe.

          In over 20 European markets where we do not have a direct sales force, we sell our products through distributors and agents. These distributors and agents, as well as those mentioned under "Elsewhere in the World" below, handle various travel-related products in addition to our products. Distribution agreements generally provide for mutual exclusivity, whereby distributors do not handle competitors' luggage products and we do not sell to other distributors or agents in their territory.

          North America.    Our Samsonite® Black Label products are sold in high-end department and specialty luggage stores. Our Samsonite® and American Tourister® branded products are sold in North America primarily through traditional luggage retail distribution channels such as mid-level department stores and luggage specialty stores. Some national retailers and warehouse clubs carry Samsonite® and American Tourister® products uniquely designed for them. American Tourister® products are primarily sold to middle income and value conscious consumers through discount channels such as mass merchants and factory outlets. Our direct sales force of approximately 30 professionals services our customers' retail outlets throughout North America.

          We currently operate approximately 189 retail stores in North America that distribute Samsonite® and American Tourister® products designed specifically for these stores, a variety of travel-related products, and our excess and discontinued products. In fiscal year 2006, approximately 32.4 per cent of our sales in North America came from our retail stores.

          Asia.    We sell our products through 31 Company-operated Samsonite® retail stores, over 150 Company operated "shop-in-shop" or "corners" in department stores and 173 non-Company operated franchise stores, as well as specialty stores and travel stores. We market directly in Japan, Korea, India, China, Hong Kong, Singapore, Taiwan and Malaysia. In other Asian markets where we do not market directly, we sell through distributors and agents. Our American Tourister® brand is sold in selective Asian markets through hypermarkets, specialty stores and department stores. Revenues from Asian operations increased 29.0 per cent from fiscal year 2005 to fiscal year 2006.

          Latin America.    Our Samsonite® and American Tourister® branded products are sold in Latin America primarily through traditional luggage retail distribution channels such as department stores and luggage specialty stores. Some national retailers and warehouse clubs carry Samsonite® and American Tourister® products uniquely designed for them. We also operate 19 retail stores in Latin America that distribute Samsonite® and American Tourister® products, and provide a profitable distribution channel to liquidate our excess and discontinued products. Because American Tourister® products are primarily sold to middle income and value conscious consumers, discount channels such as mass merchants and warehouse clubs are especially important to the distribution of American Tourister® branded products in Latin America. Revenues from Latin America increased 15.8 per cent from fiscal year 2005 to fiscal year 2006, and increased 22.4 per cent from fiscal year 2004 to fiscal year 2005.

          Elsewhere in the World.    In markets outside Europe, North America, Asia and Latin America, we sell our products either directly by export or through agents and distributors or under license. Products sold in these international markets are shipped from Eastern and Western Europe or Asia depending upon product type and availability. In some instances, we entered new markets through third party distributors and subsequently acquired these third party distributors as the markets developed.

Distribution Channels

          Specialty stores.    Our products are currently sold in specialty luggage stores around the world. Sales through specialty stores represented approximately 26.1 per cent of our net product sales in fiscal year 2006, compared with 26.5 per cent and 29.2 per cent of our net product sales in fiscal year 2005 and fiscal year 2004, respectively.

          Department stores.    Our products are currently sold in department stores, such as Macy's, Lane Crawford and Harrods. Department store sales represented approximately 22.3 per cent of our net product sales in fiscal year 2006, compared with 21.3 per cent and 20.3 per cent of our net product in fiscal year 2005 and fiscal year 2004, respectively.

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          Mass merchants.    Our products are currently sold in mass merchant stores such as Wal-Mart in the United States and Auchan in Europe. Sales through mass merchant stores represented approximately 6.3 per cent of our net product sales in fiscal year 2006, compared with 5.4 per cent and 5.2 per cent of our net product sales in fiscal year 2005 and fiscal year 2004, respectively.

          Office superstores.    Our products are currently sold in office superstores such as Staples in the United States. Sales through office superstores represented 3.8 per cent of our net product sales in fiscal year 2006, compared with 4.8 per cent and 4.5 per cent of our net sales in fiscal year 2005 and fiscal year 2004, respectively.

          Warehouse clubs.    Our products are currently sold in warehouse clubs, mostly in the United States, such as Costco. Sales through warehouse clubs represented approximately 1.9 per cent of our net product sales in fiscal year 2006, compared with 1.9 per cent and 2.4 per cent of our net product sales in fiscal year 2005 and fiscal year 2004, respectively.

          Retail stores.    The remainder of our sales are realised through our network of directly operated stores. We currently operate approximately 284 retail stores worldwide that distribute Samsonite®, Samsonite® Black Label, and American Tourister® products, a variety of travel-related products, and our excess and discontinued products. We operate over 150 shop-in-shop concessions primarily in Asia. We have also entered into "franchise" arrangements with approximately 173 retailers that enable us to assist the retailer with store location, signage, and retail marketing in exchange for exclusive supply arrangements in Asia (mainly India, South Korea and China). A summary of our store count at the end of fiscal year 2006 follows:

Advertising

          Advertising resources are committed to brand advertising programs that promote the brand image and product features of our luggage and related products. Samsonite's global advertising strategy is a fully integrated and targeted advertising effort through print, billboards, public relations, in-airport, on-line, and in-store advertising. During fiscal year 2006, we began to use an internationally recognised spokesperson, Sir Richard Branson, to globally advertise our PRO-DLX line in print. We will continue this strategy in fiscal year 2007 with print advertising featuring international actress Isabella Rossellini promoting the new Samsonite® Black Label Vintage collection, and well-known Spanish flamenco dancer Joaquín Cortés promoting the new Samsonite® Black Label X'Lite products — the lightest, strongest products that Samsonite has ever created. We assist our trade customers in adapting their advertising to our global advertising campaigns through various cooperative advertising programs. We employ other promotional activities to further support our trade customers and increase product sales, including in-store point of sale print support and display fixturing along with consumer loyalty programs. At www.samsonite.com and www.samsoniteblacklabel.com, we communicate our corporate message, product and brand image through an integrated global website. In fiscal year 2006 we spent approximately $70.8 million on advertising and marketing promotion activities, an increase of 67.1 per cent compared with fiscal year 2004. For the last five fiscal years we have expended, on average, in excess of $51.4 million annually in global communications, cooperative advertising programs, public relations, and promotional activities (such as catalogues, point of display materials, trade shows and sales samples) to support the sale of our branded products.

Manufacturing and Sourcing Products

          We believe that our large size and leading market position allows us to achieve volume driven purchasing and manufacturing economies of scale. Our global product-sourcing network consists of various third party finished goods suppliers located principally in Asia and Eastern Europe and Samsonite-operated manufacturing facilities. Our global sourcing network enables us to obtain economies of scale by sourcing products from countries with low production costs while maintaining the

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same quality standards as are applied to the products we manufacture ourselves. We continue to adjust our business model to reduce fixed manufacturing costs and to adopt a more variable cost model that increases the amount of goods sourced from lower-cost production regions primarily in Asia. Over the past several years we have closed several manufacturing facilities in the United States, Mexico, Belgium and Spain. During fiscal year 2006, we disposed of a hardside manufacturing facility in Hénin-Beaumont, France. Our remaining manufacturing facilities include hardside plants in Oudenaarde, Belgium and Nashik, India; and softside plants in Samorin, Slovakia and Szekszard, Hungary. Our initiatives are reflected in the ratio of manufactured softside products declining from 23.0 per cent in fiscal year 2004 to 11.0 per cent in fiscal year 2006.

          In fiscal year 2006, we purchased 89.0 per cent of our softside products from third-party vendors in Asia and Eastern Europe. We select different third-party vendors to benefit from differences in manufacturing costs, payment terms and shipping costs. We do not rely on any single third-party vendor whose loss would be material to us. The remaining 11.0 percent of our softside and hybrid products was produced in Company-operated factories. Further, substantially all of our hardside products are manufactured in our own facilities.

          Softside luggage is primarily made from fabric including nylon, polyester and vinyl, as well as aluminium, steel, plastics and leather. These materials are purchased from various vendors throughout China and Taiwan and are readily available. The hardside luggage is composed primarily of polypropylene, which we source from two European suppliers, and various combinations of ABS (acrylinonitrile butadiene styrene) and polycarbonate, which we source from suppliers in India and Europe. None of these hardside materials is difficult for us to obtain as numerous third party vendors exist.

          We maintain a vigorous quality control program for goods manufactured at our own plants and at third-party vendor facilities. New products are put through a series of simulation and stress tests to assure durability and strength. In our manufacturing facilities and our Asian quality assurance office, we use quality control inspectors, engineers and lab technicians to monitor product quality and production standards at vendors' production facilities.

Competition

          Competition in the worldwide luggage industry is very fragmented. We have several regional competitors in each of our country markets (Europe, North America, Latin America and Asia), but no other company competes on a global scale with us.

          Throughout our regional markets we compete based on brand name recognition, reputation for product quality, product differentiation, new product innovation, customer service, high-quality consumer advertising campaigns and quality to price comparisons. We are well established in the distribution channels critical to luggage distribution, which we believe gives us a competitive advantage.

          The manufacture of softside luggage is labour intensive but not capital intensive; therefore, barriers to entry by competitors in this market segment are relatively low. This is reflected by the many small competitors present in the softside luggage market. In addition, we compete with various large retailers, some of whom are our customers, who have the ability to purchase private-label softside luggage directly from low-cost manufacturers. The manufacture of hardside and hybrid luggage is more capital intensive and there are relatively few finished goods vendors; consequently, barriers to entry are relatively high. Nonetheless, we have several competitors worldwide in the hardside luggage market.

Customers

          Our customers include specialty stores featuring luggage products, major department stores that carry luggage, retail chain stores, mass merchants, office superstores, warehouse clubs, premium sales (sales direct to business), Internet retailers and discounters. We also sell certain products directly to consumers through Samsonite®-operated retail stores in Europe, North America, Latin America and Asia and over the Internet at our www.samsonitecompanystores.com and www.samsoniteblacklabel.com websites. We do not depend on any single customer for more than 3.3 per cent of our consolidated revenues.

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Management Information Systems

          We are in the process of replacing all of our various business information systems worldwide with the SAP Enterprise Resource Planning (ERP) system. This global system is a single instance of software, with Samsonite standardised templates, hosted by SAP in Germany. The standardised templates will help the company assure data integrity and consistency of information collected from all entities. The pilot implementation begins in June 2006 with our Canadian operations, followed by a planned U.S. implementation in the third quarter of 2006, and a planned European implementation in the fourth quarter of 2006. We intend to have Phase I implementation complete on a worldwide basis by mid-2007. Our Phase II implementation will utilise SAP's Retail solution and other system enhancements. We expect Phase II implementation to be completed in the first quarter of 2008.

Environmental Matters

          Our operations throughout the world are subject to federal, state and local environmental laws and regulations. These environmental laws and regulations govern the generation, storage, transportation, disposal and emission of various substances. We work to ensure that our existing operations comply fully with these laws and regulations. Although compliance involves continuing costs, the ongoing costs of compliance with existing environmental laws and regulations have not had, nor are they expected to have, a material effect upon our cash flow or financial position. From time to time we have incurred, or accrued for, cleanup or settlement costs for environmental cleanup matters associated, or alleged to have been associated, with our historic operations. To date these expenses have not had a material effect upon our cash flow or financial position. Unknown, undiscovered or unanticipated situations or events may require us to increase the amount we have accrued for any environmental matters.

Trademarks, Patents and Product Development

          We are the registered owner of Samsonite®, American Tourister® and other trademarks. As of the end of fiscal year 2006, we had approximately 1,988 trademark registrations and 210 trademark applications pending in the United States and abroad covering luggage, travel equipment, apparel products and retail services. Our Samsonite® and American Tourister® trademarks are of material importance to our business. Our trademark registrations in the United States and elsewhere will remain in existence for as long as we continue to use and renew them on a timely basis.

          We also own approximately 110 United States patents and approximately 782 patents in selected foreign countries (i.e., patents of inventions, industrial design registrations and utility models). In addition, we have approximately 323 patent applications pending worldwide. We pursue a policy of seeking patent protection where appropriate for inventions embodied in our products. The patents we hold provide barriers to competition in applicable portions of our business, primarily associated with hardside and hybrid luggage products. Our patents and pending patent applications cover features, designs and processes in most of our mid- and higher-priced product lines. Although some companies have sought to imitate some of our patented products and our trademarks, we have generally been successful in enforcing our worldwide intellectual property rights.

          We devote significant resources to new product design, development and innovation. We estimate that we have spent on average $7.4 million per year over the last three fiscal years on new product design and development. We start with market research to identify consumers' functional requirements and style preferences. Once identified, we employ designers and development engineers and work with outside designers to develop new products that respond to those requirements and style preferences. We attempt to differentiate ourselves from our competitors by offering products that are innovative and distinctive in style and functionality. During fiscal year 2006, we hired a new Creative Director with extensive background in the design of luxury bags and accessories and realigned all global design functions under his direction.

Employees and Labour Relations

          As of the end of fiscal year 2006, we had approximately 5,000 employees worldwide, with approximately 1,200 employees in North America, 2,200 employees in Europe, 1,300 employees in Asia and 300 employees in Latin America. In the United States, approximately 100 employees are unionised under a contract that is renewed every three years and was most recently renewed in April 2005. As of the end of fiscal year 2006 we employed in our European manufacturing plants approximately 800 workers in Belgium and approximately 700 workers in Slovakia and Hungary. In Europe, union membership is not definitively known to Samsonite, as union membership is confidential and varies from country to country. It is probable that most of our European workers are affiliated with a union, but we have no way of officially confirming this. Most European union contracts have a one-year duration. We believe our employee and union relations are generally satisfactory.

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PART V: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

          Prior to Admission, we expect that Mr. Richard Wiley, who is one of our executive officers serving the role of Chief Financial Officer, Treasurer and Secretary, will be appointed to our Board of Directors as an executive Director. In addition, prior to or as soon as practicable after Admission, we expect that certain of the non-executive Directors currently on our Board of Directors will resign from their positions. Prior to or as soon as practicable after Admission, we also expect to appoint a non-executive Chairman and one new non-executive Director to our Board of Directors. We expect to make these changes to the composition of our Board of Directors in order to reconstitute our Board of Directors in a manner that will reflect more closely the recommendations set out in the U.K. Combined Code on Corporate Governance in relation to Board composition. See "— Corporate Governance" below. There can be no assurance that these changes will be effected prior to or soon after Admission or at all. In addition, if the global offering does not proceed, we may not make any such changes to the composition of our Board of Directors.

          Marcello Bottoli.    Mr. Bottoli was appointed President and Chief Executive Officer in March 2004 and was appointed as a director of Samsonite in September 2005. From 2001 to 2002 Mr. Bottoli, was Chairman of the Board and Chief Executive Officer of Louis Vuitton, part of the LVMH group, a luxury consumer products company. From 1991 to 2001 he held several management roles at the Benckiser Group (now Reckitt Benckiser), a global consumer products company. At Benckiser, Mr. Bottoli worked in various positions in Spain, France, the Netherlands and the United Kingdom and became a Management Board member and Executive Vice President of Benckiser as of 1993. He began his career with Procter & Gamble, in France and the United States, and prior to joining the Benckiser Group, spent two years with The Boston Consulting Group, a diverse global business consulting firm, in the firm's Paris and Milan offices.

          Charles J. Philippin.    Mr. Philippin became a director of Samsonite in October 2003. Mr. Philippin has been a principal with GarMark Advisors, a mezzanine investment fund, since 2002. From 2000 to 2002, Mr. Philippin was Chief Executive Officer of Online Retail Partners, an internet incubator company. From 1994 to 2000, Mr. Philippin held several positions with Investcorp, a global investment group, including serving as a member of its management committee, and was responsible for post-acquisition monitoring and performance improvement for the firm's U.S. portfolio. From 1974 to 1994, Mr. Philippin was with the public accounting firm of Coopers & Lybrand (now PricewaterhouseCoopers), and was a partner of the firm from 1982. Mr. Philippin serves on the boards and audit and compensation committees of Competitive Technologies, Inc., CSK Auto Corporation and on the board and audit committee of Alliance Laundry Systems.

          Ferdinando Grimaldi Quartieri.    Mr. Grimaldi became a director of Samsonite in October 2003. Since 2002, Mr. Grimaldi has been a Managing Director of Bain Capital, Ltd., a private investment firm based in London. Prior to joining Bain Capital, Mr. Grimaldi was responsible for private equity investments at Investcorp International Limited for six years and was a member of the firm's management committee from 1999 until 2002.

          Antony P. Ressler.    Mr. Ressler became a director of Samsonite in July 2003. Mr. Ressler is the Managing Member of Ares Management, LLC, and serves as an Investment Committee member on all Ares funds. In 1997, Mr. Ressler co-founded Ares, an independent investment management firm with approximately $11 billion of committed capital under management. Ares specialises in managing assets in the private equity and leveraged finance markets. Mr. Ressler co-founded Apollo Management in 1990. Mr. Ressler oversaw Apollo's capital markets activities, focusing particularly on distressed and

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private equity investment opportunities originating as a result of day-to-day involvement in the capital markets. Prior to 1990, Mr. Ressler served as a Senior Vice President in the High Yield Bond Department of Drexel Burnham Lambert Incorporated, with responsibility for the New Issue/Syndicate Desk. Mr. Ressler serves on the board of Allied Waste Industries, Inc. and several private companies.

          Lee Sienna.    Mr. Sienna became a director of Samsonite in October 2003. Mr. Sienna has been Vice President of the private equity group of Ontario Teachers' Pension Plan Board since 2002. From 1998 to 2002, Mr. Sienna was a partner at Calcap Corporate Finance Limited, a consulting firm specialising in mergers and acquisitions. From 1995 to 1998, Mr. Sienna was Vice President, Corporate Development at Dairyworld Foods. Prior to 1995, Mr. Sienna held various positions in management and corporate development for companies in the beverage, food and entertainment industries.

          Donald L. Triggs.    Mr. Triggs became a director of Samsonite in October 2003. Since 1993, Mr. Triggs has been the President, Chief Executive Officer and a Director of Vincor International, Inc., a global wine producer, retailer and distributor based in Ontario, Canada with wineries in Ontario and British Columbia in Canada, Washington State, California, Australia and New Zealand. In August 1989 Mr. Triggs became Chairman, Chief Executive Officer and a Director of Cartier Wines & Beverage Corporation, which became Vincor International in 1992 as a result of a merger.

          Richard T. Warner.    Mr. Warner became a director of Samsonite in October 2003. Since 2004, Mr. Warner has been a founding partner of Hemisphere One, a global investment firm focused on investing in lifestyle brands. From 1994 to 2003, Mr. Warner served in several senior capacities at Investcorp, a global investment group. From 1999 to 2002 he was head of Investcorp's European business, responsible for the firm's European private equity activities. Mr. Warner also led Investcorp's review of various global strategic options. In addition, he served as a member of the firm's Coordinator's Committee (global operating board of Investcorp), Commitment Committee (controls Investcorp's global capital commitments) and Budget and Expense Review Committee (controls Investcorp's operating expenses).

          Melissa Wong Bethell.    Ms. Bethell became a director of Samsonite in September 2005. Ms. Bethell is a principal with Bain Capital, Ltd., responsible for private equity investments since 1999. Prior to joining Bain Capital, Ms. Bethell worked at Goldman Sachs, in the Fixed Income Capital Markets division, where she covered consumer products, financial services and technology companies in the United States and Australia.

          Jeffrey B. Schwartz.    Mr. Schwartz became a director of Samsonite in September 2005. Mr. Schwartz is a vice president in the Private Equity Group of Ares. Prior to joining Ares in 2004, Mr. Schwartz was an investment banker at Lehman Brothers in the Financial Sponsor group since 2000. Mr. Schwartz also serves on the board of directors of Tinnerman Palnut Engineered Products, Inc.

Executive Officers

          Richard H. Wiley.    Mr. Wiley has been Chief Financial Officer, Treasurer and Secretary of Samsonite since March 1998. From 1995 to 1998, Mr. Wiley was Chief Financial Officer of the Americas division of Samsonite and Assistant Treasurer. Prior to joining Samsonite, from 1994 to 1995, Mr. Wiley

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was an audit and consulting senior manager with BDO Seidman, an international public accounting firm. From 1982 to 1994, Mr. Wiley was with KPMG LLP, working in the audit and consulting areas.

          Thomas Korbas.    Mr. Korbas was appointed President of the Americas Division of Samsonite in October 2004. Prior to that, since 2000, Mr. Korbas was Vice President/General Manager of U.S. Wholesale. From 1995 to 2000, he served as Vice President/General Manager and Vice President of Sales and Marketing for U.S. Non-Traditional business and Vice President of Operations. From 1994 to 1995, Mr. Korbas was Vice President/General Manager of Legacy Luggage Inc., a division of Samsonite, designing, sourcing, and selling private label luggage. From 1979 to 1994, Mr. Korbas was Sr. Vice President of Operations, Vice President of Sourcing, Director of Manufacturing, and Engineering Manager for American Tourister.

          Giuseppe Fremder.    Mr. Fremder has served as President of Samsonite S.p.A., or Samsonite Italy, Samsonite's Italian subsidiary, since October 1997. In addition, Mr. Fremder has served as Managing Director of Samsonite Italy and its predecessor, Samsonite Italy Srl., since it was founded in 1984. In 2004, Mr. Fremder was appointed President of Samsonite's Global Licensing In & Out division, and in 2000 was appointed President of Samsonite Black Label, the world-wide fashion division of Samsonite.

          Marc Matton.    Mr. Matton was appointed Chief Supply Officer of Samsonite in July 2004. Prior to that, Mr. Matton served as President and Managing Director of Samsonite Europe N.V., or Samsonite Europe, from November 2000, was Vice President Marketing and Sales at Samsonite Europe from 1995 to 2000, and additionally, was General Manager Softside Division beginning in 1998. From 1991 until 1995, Mr. Matton served as Sales Director for Samsonite Europe.

          Arne Borrey.    Mr. Borrey was appointed President Europe, Middle East and Africa in July 2004 and is responsible for Samsonite business in these regions. From 2001 to 2004, he was Vice President of Marketing & Sales for Samsonite Europe. Mr. Borrey started his career with Samsonite in 1987 as Product Planner and subsequently became Product Manager Softside. From 1990 until 1993 he worked in Spain as Marketing and Sales Manager. In Oudenaarde, Belgium, he took up the position of Manager Legacy Division and was named Sales Director Europe in 1995, a position he held until 2001.

          Shashi S. Dash.    Mr. Dash has been Samsonite's President for its Asia Pacific region since January 2004. Prior to that, and since 1999, Mr. Dash was Vice President — General Manager for Samsonite's Asia Pacific region. From 1996 to 1999, he was Executive Director, Marketing, for Samsonite India Limited. From 1994 to 1996, Mr. Dash was with Real Value Appliances as Director and Board Member, International, based in Hong Kong. Earlier in his career, Mr. Dash was with Blowplast and Aristocrat in India, involved in the building of luggage brands such as "VIP" (as Marketing Director and then President) and "Aristocrat" (as Managing Director) that are today household names in India.

          Deborah Rasin.    Ms. Rasin was appointed Vice President — Legal, General Counsel and Assistant Secretary in February 2006. Ms. Rasin has practised corporate and commercial law for 14 years. From 1997 until joining Samsonite, Ms. Rasin was an attorney at General Motors Corporation (in Zurich, Switzerland and Detroit, Michigan) where she advised on a myriad of commercial and international transactions, and served as business unit counsel and general counsel for various General Motors business units and subsidiaries. Prior to that, Ms. Rasin worked in law firms in Washington, Hong Kong and Tel Aviv. Ms. Rasin received her J.D. from Harvard Law School and is admitted to the bar in California, Washington, D.C. and Michigan.

          Ramesh Tainwala.    Mr. Tainwala has been Chief Operating Officer of Samsonite South East Asia Private Limited since June 2000. Prior to that, Mr. Tainwala was Managing Director from November 1995 through his appointment as Chief Operating Officer. As the head of Samsonite's Indian operations, he is responsible for Samsonite's manufacturing operation in India as well as its marketing and sales in the region of South Asia. His primary responsibility involves establishing the strategic and tactical direction for Samsonite in South Asia.

          Annick Desmecht.    Ms. Desmecht was appointed Chief Marketing Officer in March 2005. From 2001 to 2005, Ms. Desmecht was the Marketing Director for the Beauty Care business of Procter & Gamble Co. in Central and Eastern Europe, Middle East and Africa. From 1997 to 2000, she was Marketing Manager for the Feminine Care business of Procter & Gamble for Russia and the Ukraine, based in Moscow.

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          Quentin Mackay.    Mr. Mackay was appointed Creative Director in February 2005, responsible for the direction and coordination of Samsonite's design strategy. From 2002 to 2005, Mr. Mackay was the chief designer for Tanner Krolle, an English luxury leather brand maker of bags and accessories. From 2000 to 2002, Mr. Mackay was a general accessory designer with Loewe, in Madrid, Spain.

          Our executive officers are elected by and serve at the discretion of our Board of Directors.

Employees

          The table below sets forth the approximate number of our employees in each of the last three fiscal years:

Corporate Governance

          We support high standards of corporate governance. While we are not currently in compliance with the corporate governance principles set out in the Combined Code, subject to the corporate governance principles applicable to Delaware incorporated companies, we are committed to moving over time to a position of substantial compliance with the Combined Code.

          The Combined Code recommends, among other things, that the board of directors of a U.K. listed company should include a balance of executive and independent non-executive directors, with independent non-executive directors comprising at least one-half of the board (excluding the Chairman). The Combined Code states that the board should determine whether a director is independent in character and judgment and whether there are relationships or circumstances which are likely to affect, or could appear to affect, the director's judgment.

          Our Board of Directors is responsible for the proper management of the Company and meets regularly. While we are currently not in compliance with the recommendations of the Combined Code with respect to the composition of our Board, subject to compliance by us with our agreement with our Major Stockholders in relation to Board nominations described below, we intend to make a number of changes to the composition of our Board prior to or as soon as practicable after Admission, and some further changes over time after Admission, so as to make our Board compliant with the recommendations of the Combined Code in this respect.

Current Board composition.    We currently have a nine member Board. This is comprised of our Chief Executive Officer and eight non-executive Directors. While our Board has a strong non-executive element, only three of the current non-executive Directors are considered by the Board to be independent of management for the purposes of the Combined Code. The other five non-executive Directors were nominated by, and are employed by or otherwise affiliated with, our Major Stockholders and, accordingly, are not considered by the Board to be independent of management for the purposes of the Combined Code.

Board composition at Admission or as soon as practicable thereafter.    Prior to Admission, we plan to change our Board so that it is comprised of two executive Directors, a non-executive Chairman (who will be considered by the Board to be independent of management for the purposes of the Combined Code) and a number of other non-executive Directors (certain of whom will be considered by the Board to be independent of management for the purposes of the Combined Code, with the remainder being nominated by, and employed by or otherwise affiliated with, our Major Stockholders). Mr. Richard Wiley, who is currently one of our executive officers serving the role of Chief Financial Officer, Treasurer and Secretary, is expected to be appointed to our Board of Directors as an executive Director, alongside our Chief Executive Officer. To achieve our planned Board structure, we are expecting that certain of our existing non-executive Directors will resign and an additional non-executive Director will be appointed. We are in the process of identifying appropriate Board candidates.

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Board composition over time after Admission.    Over time after Admission, we plan to appoint further non-executive Directors who will be considered by the Board to be independent of management for the purposes of the Combined Code. Following these appointments, we expect that our Board will ultimately be comprised of two executive Directors, an independent non-executive Chairman, five independent non-executive Directors and three non-executive Directors that were nominated by, and are employed by or otherwise affiliated with, our Major Stockholders. Accordingly, independent non-executive directors will comprise at least one-half of our Board (excluding the Chairman) and therefore will comply with the recommendations set out in the Combined Code.

          There can be no assurance that we will be successful in effecting any of the changes that are proposed to be made at or prior to Admission or any of the changes that are proposed to be made following Admission. In addition, if the global offering does not proceed, we may not make any such changes to the composition of our Board of Directors.

          We are currently party to the Sponsors' Stockholders Agreement, pursuant to which our Major Stockholders have agreed to take all action lawfully within their power to cause our Board of Directors to have a certain agreed composition. We expect, prior to (and conditional upon) Admission, to terminate the Sponsors' Stockholders Agreement. For a summary of the Sponsors' Stockholders Agreement, see "Additional Information — Material Contracts — Sponsors' Stockholders Agreement" in paragraph 11.4 of Part XVI of this document. On termination of the Sponsors' Stockholders Agreement, we expect to enter into a letter agreement with our Major Stockholders, pursuant to which, subject to Ares, Bain Capital or OTPP, as the case may be, individually owning at least 10 per cent of our issued and outstanding share capital, each of our Major Stockholders will agree to take all action lawfully within its power to cause the Board of Directors to include one director nominated by Ares, Bain Capital or OTPP, respectively. For a summary of this proposed letter agreement, see "Principal and Selling Stockholders — Letter Agreement with Major Stockholders" in Part XIII of this document. While we and our Major Stockholders will, following Admission, continue to endeavour to make the required changes to our Board of Directors so that it is compliant with the recommendations set out in the Combined Code, our ability to constitute such a Board will be subject to compliance by us with our agreement with our Major Stockholders in relation to Board nominations pursuant to the proposed letter agreement.

          The Combined Code also recommends that the Board should appoint one of its independent non-executive Directors to be the senior independent director. The senior independent director should be available to stockholders if they have concerns that contact through the normal channels of chairman, chief executive officer or chief financial officer has failed to resolve or for which such contact is inappropriate. We plan to identify a senior independent director as soon as we have appointed the two further independent non-executive Directors following Admission, as described above.

          In accordance with the Combined Code, we are ready, where practicable, to enter into a dialogue with institutional stockholders based on the mutual understanding of objectives. We are also committed to the principle of effective communication with private investors, such as by the constructive use of annual general meetings of stockholders.

          In accordance with the Combined Code, we plan, conditional upon Admission, to establish guidelines requiring specific matters to be subject to decision by the full Board of Directors, including material acquisitions and disposals, investments and capital projects.

          The Combined Code recommends that a U.K. listed company should establish an audit committee, a remuneration committee and a nominations committee. In addition, the Combined Code recommends that all the members of the audit committee and the remuneration committee, and a majority of the members of the nominations committee, should be independent non-executive directors. As a U.S. public company that had its shares listed on Nasdaq until 2002, Samsonite has for several years had an Audit Committee, a Compensation Committee (that we believe serves the same function as the remuneration committee recommended by the Combined Code) and a Corporate Governance and Nominating Committee (that we believe serves the same function as the nominations committee recommended by the Combined Code). These committees are described in further detail below. Our Audit Committee is currently comprised exclusively of non-executive Directors that we consider to be independent of management for the purposes of the Combined Code. While all members of the Remuneration Committee, and a majority of the members of the Corporate Governance and Nominating Committee, are not currently comprised of non-executive directors meeting the Combined Code standards of independence, both of these committees are comprised exclusively of non-executive

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directors. Following the planned appointments of the two further independent non-executive Directors following Admission as described above, we intend to change the composition of our Compensation Committee and Corporate Governance and Nominating Committee so that all members of our Compensation Committee, and a majority of the members of our Corporate Governance and Nominating Committee, are non-executive directors meeting the Combined Code standards of independence.

Audit Committee

          The current members of our Audit Committee are Charles J. Philippin, Donald L. Triggs and Richard T. Warner, each of whom is a non-executive director that we consider to be independent of management for the purposes of the Combined Code. Our Audit Committee met 11 times during fiscal year 2006, excluding actions taken by unanimous written consent.

          Our Audit Committee is primarily concerned with the effectiveness of our accounting policies and practices, financial reporting and internal controls. Our Audit Committee is authorised (i) to make recommendations to the Board of Directors regarding the engagement of our independent auditors, (ii) to review the plan, scope and results of the annual audit, the independent auditors' letter of comments and management's response thereto, (iii) to approve all audit and non-audit services, (iv) to review our policies and procedures with respect to internal accounting and financial controls, and (v) to review any changes in accounting policy.

Compensation Committee

          The current members of our Compensation Committee are Ferdinando G. Quartieri, Antony P. Ressler and Lee Sienna, each of whom is a non-executive director, although not meeting the Combined Code standards of independence. Our Compensation Committee met once during fiscal year 2006, excluding actions taken by unanimous written consent.

          Our Compensation Committee is authorised and directed to review and approve the compensation and benefits of our executive officers, to review management organisation and development, to review and advise management regarding the benefits, including bonuses, and other terms and conditions of employment of other employees, to administer any stock option plans that may be adopted and the granting of options under such plans, and to review and recommend for the approval of the Board the compensation of our Directors.

Corporate Governance and Nominating Committee

          The current members of our Corporate Governance and Nominating Committee are Melissa Wong Bethell, Jeffrey B. Schwartz, and Lee Sienna, each of whom is a non-executive director, although not meeting the Combined Code standards of independence. Our Corporate Governance and Nominating Committee held one meeting during fiscal year 2006.

          Our Corporate Governance and Nominating Committee is, among other things, responsible for (i) generally overseeing all of our corporate governance functions, (ii) recommending director nominees to the Board, and (iii) recommending to the Board membership for each committee of the Board.

Policy on Insider Trading

          We expect to adopt, conditional upon Admission, a new Policy on Insider Trading. This will include, among other things, a code of securities dealings in relation to the Shares that will be at least as rigorous as the Model Code published in the Listing Rules. The code adopted will apply to our Directors, executive officers, other relevant employees of the Group, and their respective affiliated persons.

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PART VI: SELECTED FINANCIAL INFORMATION

          The table below sets out our selected financial information for the fiscal years 2006, 2005, 2004, 2003 and 2002. The data has been extracted without material adjustment from our U.S. GAAP consolidated financial statements and should be read in conjunction with the consolidated financial statements for the fiscal years 2006, 2005 and 2004 and related notes thereto included in Part XIV of this document as well as with "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part VII of this document. Prior to Admission, we will include in this document unaudited financial information for the three months ended April 30, 2006 prepared in accordance with U.S. GAAP.

          The selected financial information below has been prepared in conformity with U.S. GAAP. U.S. GAAP and IFRS differ in certain significant respects. A summary of certain differences between U.S. GAAP and IFRS relevant to us is set out in Part VIII of this document.

          We and our U.S. subsidiaries prepare our financial statements according to a fiscal year ending on January 31, but our non-U.S. subsidiaries prepare their financial statements according to a fiscal year ending on the previous December 31. The consolidated accounts for our group are prepared for a fiscal year ending on January 31, and we consolidate accounts prepared to the same date for us and our U.S. subsidiaries and to the previous December 31 for our non-U.S. subsidiaries. All financial information in this document is given on a consolidated basis for our group. References in this document to a fiscal year denote the calendar year in which the fiscal year for our consolidated financial statements ended (for example, the "2006 fiscal year" or "fiscal year 2006" refers to the 12 months ended January 31, 2006).

          We are in the process of replacing all of our various business information systems worldwide with the SAP Enterprise Resource Planning (ERP) system. As part of this process, we may change the fiscal year according to which we prepare our consolidated financial statements so that it ends on December 31. If we change our fiscal year, our first set of consolidated results following Admission will be our results for the period ending December 31, 2006. This will consolidate our financial statements and those of our U.S. subsidiaries for the 11 months ended December 31, 2006 and the financial statements of our non-U.S. subsidiaries for the 12 months ended December 31, 2006. However, there can be no assurance that we will be able to successfully implement our ERP system on the planned timetable. If implementation is delayed, we may not change the fiscal year according to which we prepare our consolidated financial statements until the period ending on December 31, 2007. See "Risk Factors — Risks Related to Our Business and Industry — Our business may be adversely affected if we encounter complications in connection with our implementation of SAP information management software" in Part II of this document. References in this document to the "2007 fiscal year" or "fiscal year 2007" refer to the fiscal year ending on January 31, 2007 or, assuming we change our fiscal year as we expect, to the fiscal year ending on December 31, 2006.

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Notes:

(1)

We have restated our consolidated financial statements for fiscal year 2003, fiscal year 2004 and fiscal year 2005 to correct an error in computing our deferred tax asset valuation allowance. See Note 2 to the consolidated financial statements included in Part XIV of this document.

(2)

Loss per Share — basic and diluted for the fiscal years 2006, 2005, 2004, 2003 and 2002 was computed based on the weighted average number of Shares outstanding during the respective periods. Basic loss per Share and diluted loss per Share are the same because the net loss to stockholders causes potentially dilutive Shares for options, warrants, and convertible preferred stock to be anti-dilutive.

          We have implemented various restructuring plans and incurred restructuring charges in each of our fiscal years 2002 through 2006, which may affect the comparability of the selected historical consolidated financial information presented above, and the comparability of such information to future years' financial information. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part VII of this document for further discussion of the fiscal year 2004, fiscal year 2005 and fiscal year 2006 restructurings.

          Certain reclassifications have been made to the consolidated financial statements for the fiscal years 2002 through 2005 to conform to the presentation for fiscal year 2006. See Note 1 to the consolidated financial statements included in Part XIV of this document.

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PART VII: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          The following discussion summarises the significant factors and events affecting results of operations and the financial condition of the Company for each of the fiscal years 2006, 2005 and 2004 and should be read in conjunction with the consolidated financial statements set out in Part XIV of this document and the other financial information contained elsewhere in this document. The consolidated financial statements set out in Part XIV of this document contain information for the three-year period ended January 31, 2006 prepared in accordance with U.S. GAAP. A summary of certain differences between U.S. GAAP and IFRS is set out in Part VIII of this document.

          The Company and its U.S. subsidiaries prepare their financial statements according to a fiscal year ending on January 31, but the Company's non-U.S. subsidiaries prepare their financial statements according to a fiscal year ending on the previous December 31. The group's consolidated accounts are prepared for a fiscal year ending on January 31, and we consolidate accounts prepared to the same date for the Company's U.S. subsidiaries and to the previous December 31 for the Company's non-U.S. subsidiaries. All financial information is given on a consolidated basis for the group. References in this document to a fiscal year denote the calendar year in which the fiscal year for the Company's consolidated financial statements ended (for example, the "2006 fiscal year" or "fiscal year 2006" refers to the 12 months ended January 31, 2006).

          The Company is in the process of replacing all of its various business information systems worldwide with the SAP Enterprise Resource Planning (ERP) system. As part of this process, the Company may change the fiscal year according to which the Company prepares its consolidated financial statements so that it ends on December 31. Accordingly, the Company's first set of consolidated results following Admission will be its results for the period ending December 31, 2006. This will consolidate the financial statements of the Company and its U.S. subsidiaries for the 11 months ended December 31, 2006 and the financial statements of the Company's non-U.S. subsidiaries for the 12 months ended December 31, 2006. However, there can be no assurance that the Company will be able to successfully implement its ERP system on the planned timetable. If implementation is delayed, the Company may not change the fiscal year according to which it prepares its consolidated financial statements until the period ending on December 31, 2007. See "Risk Factors — Risks Related to Our Business and Industry — Our business may be adversely affected if we encounter complications in connection with our implementation of SAP information management software" in Part II of this document. References in this document to the "2007 fiscal year" or "fiscal year 2007" refer to the fiscal year ending on January 31, 2007 or, assuming we change our fiscal year as we expect, to the fiscal year ending on December 31, 2006.

          The Company's operations consist primarily of the design, manufacture and distribution of luggage, as well as business, computer, outdoor and casual bags. The Company sells its products under a number of brand names, primarily Samsonite® and American Tourister®, and licensed brand names including Lacoste®. The Company also licenses its brand names and is involved with the design and sale of footwear. The discussion is organised under the following headings: Restatement of Financial Statements, Executive Overview, Results of Operations, Liquidity and Capital Resources, Off-Balance Sheet Financing and Other Matters, Critical Accounting Policies and New Accounting Standards.

Restatement of Financial Statements

          As discussed in Note 2 to the accompanying consolidated financial statements set out in Part XIV of this document, we have restated our consolidated financial statements as of and for fiscal years 2005 and 2004 and other related financial data presented in this Management's Discussion and Analysis of Financial Condition and Results of Operations to correct an error in computing our deferred tax asset valuation allowance.

Executive Overview

          The Company had significantly improved results for fiscal year 2006 compared to the prior year. The Company believes these results were achieved as a result of progress made in executing its strategic plan and improved economic conditions affecting travel activities in many regions of the world.

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          The Company's business plan involves the following strategies:

•

Increasing sales by positioning Samsonite as an elite, lifestyle brand through improving product assortment, acquiring complementary brands, expanding geographically, and maintaining investment levels in high-impact promotional activities.



•

Increasing gross profit margins by assuring that new product introductions carry higher margins than the products they are replacing, expanding Samsonite's presence in the higher price-point and higher margin luxury segment of the market, making price increases where possible, and leveraging economies of scale in our supply chain to generate efficiencies and lower fixed costs.



•

Controlling and re-qualifying SG&A expenses from non-sales generating expenses in general and administrative cost to growth generative investments in brand support and promotion and retail expansion.



•

Improving cash flow through enhancements in operational performance and a reduction in working capital levels achieved by streamlining product lines, optimising inventory levels and aggressively managing customer credit and vendor payment terms.

          Consolidated revenues for fiscal year 2006 increased to $966.9 million from $902.9 million in the prior year, an increase of $64.0 million or 7.1 per cent. The increase in sales primarily resulted from improved worldwide travel activities. The sales increase was also driven by increased spending on brand and product support, with global sales and advertising spending increasing from $57.2 million in the prior year to $70.8 million in fiscal year 2006. New product lines and product innovation also fuelled sales growth, most notably the Lacoste casual bag line and the popular Spinner four-wheel system incorporated into many of our best product lines. Economies in Asia, the United States and Latin America were very strong with high consumer confidence and spending levels on business and pleasure travel. Growth in our large European sales has slowed from historic levels as many economies in Western Europe were affected in fiscal year 2006 by high unemployment and lower consumer spending levels. European consumer preferences are also trending toward softside luggage and casual bags versus hardside luggage. The Company's direct retail sales in the United States that are predominantly through factory outlet stores were adversely affected by a general slowdown in the factory outlet mall business we believe was the result primarily of higher gasoline prices, although retail operating margins were better.

          Operating income increased from $65.7 million in fiscal year 2005 to $73.0 million in fiscal year 2006. Execution of the strategic plan to improve margins resulted in a 250 basis point increase in gross profit margins from 46.2 per cent in the prior year to 48.7 per cent in fiscal year 2006. Consolidated gross profit was $470.4 million in fiscal year 2006 compared to $417.0 million in the prior year. Operating income for the current fiscal year is after deduction for restructuring charges and expenses of $11.2 million and asset impairment charges of $5.4 million. These charges relate primarily to the disposal of a hardside manufacturing plant in France. Selling, general and administrative expenses were higher than the prior year by $39.7 million, an increase of 11.6 per cent. The increase is due primarily to increased advertising and promotion expenses of $13.6 million, expenses related to implementation of a new ERP (Enterprise Resource Planning) system of $6.1 million, an increase in stock and deferred compensation expense of $1.5 million, and increased variable expenses associated with higher sales levels. The net loss to common stockholders was $1.5 million in fiscal year 2006 compared to $23.4 million in the prior year.

          The Company also made progress in reducing the number of SKU's (stock keeping units) associated with its core product lines, reducing the level of days outstanding for accounts receivable, and extending payment terms to suppliers. In absolute dollar terms and adjusted for translation rates from last year to this year, both inventory and receivable levels are up somewhat because of the expanded Lacoste and Black Label product lines and higher sales levels. Working capital (accounts receivable plus inventory less accounts payable) improved by approximately $30.8 million primarily because of extending vendor payment terms. As of January 31, 2006, the Company had cash on hand of $85.4 million and total debt of $307.2 million. This compares to cash on hand of $56.4 million and total debt of $354.3 million as of January 31, 2005. During fiscal year 2006, the Company retired $30.1 million of its 8⁷/8 per cent senior subordinated notes as a result of improved cash flow from operations. Availability on our revolving senior credit facility as of January 31, 2006 was €22.0 million and $35.0 million.

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          The Company plans to continue execution of the above described strategic business plan and believes it has significant opportunities for future improvements to consolidated sales, margins and working capital. Key challenges the Company faces in executing its strategic plan in fiscal year 2007 include the following:

•

Successful expansion into the luxury luggage and casual bag market through the Samsonite® Black Label and Lacoste® brand names.



•

Successful modification of our retail business model to operate stores under three different platforms: Samsonite Black Label, Samsonite, and Samsonite and American Tourister Factory Outlets.



•

Successful execution of our direct entry into the Japan market and certain other markets where we are negotiating new joint ventures with existing distributors.



•

Successful promotion of our European sales through more rapid product introductions and improved marketing and advertising.



•

Successful improvement of supply chain logistics, including better economies of scale and further reduction of fixed manufacturing costs.

          The successful execution of the Company's strategic business plan is subject to the risks and uncertainties as described in "Risk Factors" set out in Part II of this document.

Results of Operations

          For purposes of this management's discussion and analysis of operations, we are analysing our net sales and operations as follows: (i) "Europe" operations, which include European sales, manufacturing and distribution, wholesale and retail operations; (ii) the "North America" operations, which include U.S. Wholesale, U.S. Retail sales and Canada operations; (iii) "Latin America" operations, which include operations in Mexico, Brazil, Argentina and Uruguay; (iv) "Asia" operations, which include the sales, manufacturing and distribution operations in India, China, Singapore, South Korea, Japan, Taiwan and Malaysia; and (v) "Other Operations" which include certain licensing activities and Corporate headquarters. In May 2006, the Company opened a London office where its Chief Executive Officer and certain other key executives will be located.

          Certain reclassifications have been made to the consolidated financial statements for the years ended January 31, 2005 and 2004 to conform to the January 31, 2006 presentation. See Note 1 to the consolidated financial statements contained in Part XIV of this document.

Fiscal Year 2006 Compared to Fiscal Year 2005

          Sales.    The following is a summary of the Company's revenues by geographic area:

          On a U.S. dollar basis, sales from European operations increased to $417.4 million in fiscal year 2006 from $406.0 million in fiscal year 2005, an increase of $11.4 million, or 2.8 per cent. Changes in currency translation rates from fiscal year 2005 to fiscal year 2006 had a very small effect on reported European sales. Expressed in the local European currency (euros), fiscal year 2006 sales increased by 3.0 per cent, or the U.S. constant dollar equivalent (calculated using the prior year average translation rate) of $12.2 million, from fiscal year 2005. The increase in European sales is attributable to the southern and eastern European countries where we posted sales increases from the prior year despite weak or flat economic conditions throughout the western European countries and the United Kingdom where sales declined from the prior year. Fiscal year 2006 sales trends were away from structured hardside and

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softside luggage sales, which declined by a combined 5 per cent and towards casual and outdoor product sales, which increased by 28 per cent over the prior year. Sales of Lacoste® brand products accounted for much of the increase in the sales of casual bag products. European sales continue to be concentrated in the department and specialty store channels, which accounted for approximately 70 per cent of total European sales in both fiscal year 2006 and 2005. Sales through our Company-operated retail stores accounted for approximately 9 per cent of European sales in both fiscal year 2006 and 2005. The Company had 50 retail stores open throughout Europe at the end of fiscal year 2006.

          Sales from the North America operations increased to $363.9 million in fiscal year 2006 from $343.0 million in fiscal year 2005, an increase of $20.9 million, or 6.1 per cent. The United States and Canada enjoyed strong economies during fiscal year 2006 and increased demand for air travel. The strong economy coupled with increased advertising and promotional expenses and well-accepted new product offerings contributed to an 11.7 per cent increase in U.S. wholesale sales, which increased from $203.5 million to $227.3 million. Fiscal year 2006 sales trends were away from hardside luggage, which declined to 6.2 per cent of North American sales in fiscal year 2006 from 8.1 per cent in fiscal year 2005, and toward softside luggage, which increased to 71.5 per cent of North American sales in fiscal year 2006 from 67.0 per cent in fiscal year 2005. Sales of casual and outdoor bags were approximately the same as the prior year. Business and computer case sales declined by approximately 6.1 per cent from the prior year.

          Sales through traditional distribution channels (department and specialty stores) increased by $9.4 million, or 12.5 per cent, over the prior year; sales in non-traditional channels (exclusive label, mass merchants, warehouse clubs, office product superstores) increased by $9.0 million, or 10.6 per cent over the prior year as the Company strategically terminated economically unattractive relationships with certain OEMs and retailers. Sales in the traditional channel and non-traditional channels were about 41 per cent and 55 per cent, respectively, of total wholesale sales in both fiscal years 2006 and 2005. Our U.S. retail sales, which are primarily through Company-operated factory outlet stores, declined by $3.8 million, a decrease of 3.1 per cent. Sales in factory outlet stores were adversely affected by higher gas prices and price discounting at urban and suburban malls. U.S. wholesale and retail sales were helped by consumer acceptance for the Spinners product (a four wheel system which is featured in several different product lines). In our company-operated retail stores, comparable store sales for fiscal year 2006 increased by 0.7 per cent. Comparable store sales increase is calculated by dividing aggregate sales for stores open for each full month in the current year by aggregate sales for the same stores open for the corresponding full month in the prior year. Stores must be open for 13 months before they are included in the calculation. Relocated stores (within the same mall location) and remodeled stores are included in the computation of comparable store sales. When a store is closed, its sales are no longer included in the comparable store calculation. There were 189 Company-operated retail stores as of January 31, 2006 and 2005. Canadian sales increased by $0.9 million from $16.5 million in fiscal year 2005 to $17.4 million in fiscal year 2006.

          Sales from Asia operations increased to $127.7 million in fiscal year 2006 from $99.0 million in fiscal year 2005, an increase of $28.7 million or 29.0 per cent. The increase in sales is primarily due to higher sales in South Korea and China, which increased by $5.9 million and $4.9 million, respectively. Asian sales growth resulted from an increase in the number of retail stores and the introduction of new product lines during the year.

          Sales increased in all our Latin America operations to $41.8 million in fiscal year 2006 from $36.1 million in the prior year, or 15.8 per cent. Sales in Mexico and Brazil increased $2.6 million and $1.4 million, respectively, due to improved category management, economic conditions, and consumer acceptance of new products.

          The decrease in Other revenues of $2.7 million was primarily due to the termination of an agreement with a Samsonite licensee in Japan, which caused royalty revenues to decline by $4.5 million. Other revenues also include a $3.2 million gain on the sale of certain apparel trademark rights.

          Gross Profit.    The Company includes the following types of costs in cost of goods sold: direct product purchase and manufacturing costs, duties, freight-in, receiving, inspection, internal transfer costs, and procurement and manufacturing overhead. The Company includes the following types of costs in selling, general and administrative expenses, or SG&A: warehousing, order entry, billing, credit, freight-out, warranty, salaries and benefits of administrative and sales personnel, rent, insurance, taxes, office supplies, professional fees, travel, communications, advertising, investor relations, public

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company expenses and other expenses of a general and administrative nature not directly related to the cost of acquiring or manufacturing its products. Other comparable companies may include warehousing, freight-out and other types of costs that the Company includes in SG&A in cost of goods sold. For the year ended January 31, 2006 and 2005, the Company had warehousing and freight-out expenses of $56.4 million and $55.1 million, respectively.

          Consolidated gross profit in fiscal year 2006 was $470.4 million compared to $417.0 million in fiscal year 2005, an increase of $53.4 million. Consolidated gross margin as a percentage of sales increased by 250 basis points to 48.7 per cent in fiscal year 2006 from 46.2 per cent in fiscal year 2005.

          Gross margins for Europe increased to 47.5 per cent in fiscal year 2006, from 45.0 per cent in the prior year period, an increase of 250 basis points. Gross margin percentages increased for the year due primarily to sales price increases and increased product sourcing from the Far East at lower product costs and reduction of fixed manufacturing costs from restructurings.

          Gross margin percentage for North America increased to 43.2 per cent in fiscal year 2006, from 41.7 per cent in the prior year period, an increase of 150 basis points. This increase is primarily due to an increase in U.S. wholesale gross margin percentage to 33.5 per cent in the current year from 31.1 per cent in the prior year, which is a result of price increases and increased sales in higher margin channels. U.S. retail gross profit margins increased to 61.5 per cent in fiscal year 2006 compared to 58.9 per cent in fiscal year 2005, due primarily to price increases and a change in product offerings to higher margin products.

          Gross margin for Asia increased to 60.5 per cent in fiscal year 2006, from 56.4 per cent in the prior year, an increase of 410 basis points. The increase is primarily due to price increases and increased sales within higher margin sales channels such as department stores.

          Gross margin for Latin America increased to 51.7 per cent in fiscal year 2006, from 45.3 per cent in the prior year, an increase of 640 basis points. The increase was primarily driven by stronger local currencies, which results in higher reported sales and lower product costs on purchases paid for in U.S. dollars.

          Selling, General and Administrative Expenses ("SG&A").    Consolidated SG&A in fiscal year 2006 was $381.2 million compared to $341.5 million in fiscal year 2005, an increase of $39.7 million or 11.6 per cent. The Company includes warehousing and freight-out costs in selling, general and administrative expenses, while comparable companies may include such costs in costs of goods sold. For the years ended January 31, 2006 and 2005, the Company had warehousing and freight-out expenses of $56.4 million and $55.1 million, respectively.

          SG&A for Europe increased by $4.2 million, primarily due to a $4.3 million increase in advertising expense and a $2.5 million increase in variable selling expense and other SG&A expense of $0.3 million, offset by reductions of $1.3 million in bad debt expense and $1.6 million in other administrative expense. The bad debt provision was reduced because improved enforcement of credit terms and better collection efforts have reduced exposure to bad debts.

          SG&A for North America increased by approximately $4.7 million due to increased advertising expense of $2.9 million, increased warehousing costs of $1.0 million and various other increases of $0.8 million.

          SG&A for Asia increased by $19.3 million due to $7.9 million of expenses from the Japanese joint venture operations, increased advertising and promotional expense of $5.9 million, and increased variable selling expenses associated with higher sales levels. Operations of the Japan joint venture had not commenced in the prior year so its SG&A was incremental to total Asian SG&A in fiscal year 2006.

          SG&A for Latin America increased by $3.4 million due primarily to variable selling expenses associated with higher sales levels and higher advertising levels.

          SG&A for the corporate headquarters and licensing increased by approximately $8.1 million due to ERP system implementation expenses of $5.7 million that were not incurred in the prior year, an increase in pension expense of $3.2 million, an increase in stock and deferred compensation expense of $1.5 million, an increase of $1.0 million for global marketing and design, offset by a decrease in consulting expense of $2.2 million and various other decreases totalling $1.1 million.

          Provision for Restructuring Operations and Asset Impairment Charge.    The Company recorded restructuring charges totalling $11.2 million and asset impairment charges of $5.4 million during fiscal year 2006, primarily in the European segment, including $1.2 million of restructuring related expenses that are included in cost of sales.

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          A restructuring and impairment charge was incurred in connection with the August 31, 2005 sale of the Hénin-Beaumont, France facility, or the H-B site. The Company made cash payments to the purchaser of $9.9 million and has an additional payment obligation of $1.4 million in 24 months, all of which relates to the assumption by the purchaser of the Company's liability and responsibility for employee pension and social costs for the 206 employees at the H-B site. A restructuring charge of $8.6 million was recorded related to these payments, which represents the amount of the cash payment obligations less amounts previously accrued for pension liabilities for the H-B site employees. The Company also incurred legal and consulting costs of approximately $1.2 million related to the sale of the H-B site that are included in cost of sales. An asset impairment charge of $5.4 million was also recorded upon the decision to sell the H-B site for the write-off of the net book value of the H-B site property, plant and equipment sold to the purchaser. In connection with the sale, the Company agreed to purchase luggage products from the purchaser of the H-B site for a period of 24 months following the sale. The Company estimates that the sale of the plant will result in the elimination of annual fixed manufacturing overhead of approximately $5.2 million, which includes $1.4 million of depreciation expense.

          The Company also relocated its softside development centre from Torhout, Belgium to its Oudenaarde, Belgium facility and eliminated the remaining positions at its Tres Cantos, Spain manufacturing facility. Each facility had been significantly downsized and restructured over the past several years. A restructuring charge of $1.4 million was recorded related to severance obligations for 18 employees terminated as a result of these actions. Annual savings of manufacturing overheads of approximately $0.5 million are expected. No additional costs are expected to be incurred during fiscal year 2007 related to the closure of the Torhout and Tres Cantos facilities.

          The restructuring and impairment charges relate to the sale of the Company's hardside manufacturing facility in France and the shutdown of its Torhout, Belgium and Tres Cantos, Spain facilities, part of the Company's continuing efforts to reduce fixed manufacturing costs by closing inefficient facilities and increasing the amount of products sourced from low-cost manufacturing regions of the world.

          Interest Expense and Amortisation of Debt Issue Costs.    Interest expense declined to $30.5 million in fiscal year 2006 from $35.2 million in fiscal year 2005. The decline in interest expense is due to lower interest rates and debt levels. During fiscal year 2006, the Company retired $30.1 million of the 8⁷/8 per cent senior subordinated notes. In connection with the retirement of the notes, the Company incurred costs of $2.7 million which were charged to other expense for market premiums of $2.1 million and the write-off of $0.6 million of deferred financing costs. Interest expense includes $2.5 million of amortisation of debt issuance costs in fiscal year 2006 and $2.4 million in fiscal year 2005. During the second quarter of fiscal year 2005 the Company completed a refinancing of the Company's senior subordinated notes. To refinance the 10³/4 per cent notes and to pay the tender and redemption premiums of $13.7 million, the Company issued €100 million of senior floating rate notes due in 2010 and $205.0 million of 8⁷/8 per cent senior subordinated notes due in 2011. A total of $8.0 million of deferred financing costs were incurred in connection with the issuance of the floating rate senior notes and the 8⁷/8 per cent senior subordinated notes. In connection with the refinancing, costs of $17.8 million were charged to other expense for redemption premiums of $13.7 million and the write-off of $4.1 million of deferred financing costs.

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          Other Income (Expense) — Net.    The following is a comparative analysis of the components of Other Income (Expense) — Net.

          Net gain (loss) from forward foreign currency delivery contracts represents the net of realised and unrealised gains and losses on hedges of the Company's earnings from its European operations. These hedges do not qualify for hedge accounting treatment under SFAS 133 and are marked to market at the end of each accounting period. During fiscal years 2006 and 2005 the Company had realised gains (losses) of $2.2 million and $(0.2) million and unrealised gains (losses) of $(1.0) million and $0.6 million, respectively.

          Foreign currency transaction gains (losses) included in other income (expense) represent the gain or loss on intercompany payables and receivables denominated in currencies other than the functional currency. Foreign currency gains (losses) on settlement of accounts receivable or payable related to operational items are recorded in cost of sales.

          Pension expense represents the actuarial determined pension cost associated with the pension plans of two companies unrelated to our operations whose pension obligations were assumed by us as a result of a 1993 agreement with the Pension Benefit Guaranty Corporation. The plans were part of a controlled group of corporations of which we were a part prior to 1993. For a further discussion of pension plan expense, see "Pension Plans" under Critical Accounting Policies.

          As noted under "Interest Expense and Amortisation of Debt Issue Costs", the Company incurred redemption premiums of $2.1 million and wrote-off deferred financing expenses of $0.6 million in fiscal year 2006 related to the retirement of $30.1 million of subordinated notes. In fiscal year 2005, the Company charged $17.8 million to other income (expense) related to the refinancing of its outstanding subordinated notes.

          Due diligence costs in fiscal year 2006 and 2005 relate to accounting and legal costs incurred to perform due diligence on two potential acquisitions, neither of which were completed.

          Other, net expense decreased to $2.2 million in fiscal year 2006 from $4.1 million in fiscal year 2005 due to costs in the prior year associated with the initial investment in the Japan joint venture of $1.0 million and expenses of $0.7 million incurred to settle a claim for an environmental matter related to the manufacturing and office building site occupied by the Company until the late 1960s in Denver, Colorado.

          Income Taxes.    Income tax expense increased to $16.5 million in fiscal year 2006 from $13.7 million in fiscal year 2005. The increase in income tax expense is due to higher income before taxes in Asia and Latin America and a higher effective tax rate in Europe. The difference between expected income tax expense computed by applying the U.S. statutory rate to income from continuing operations, and income tax expense recognised results primarily because of (i) the tax rate differential on foreign earnings, (ii) permanent differences for stock compensation, (iii) state income taxes, (iv) the change in the valuation allowance primarily attributable to U.S. net operating losses that do not provide a benefit, and (v) U.S. taxes on foreign dividends and deemed dividends.

          Preferred Stock Dividends and Accretion of Preferred Stock Discount.    This item represents the accrual of dividends on the outstanding 8 per cent convertible preferred stock issued in the 2003

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recapitalisation. Dividends have accrued on the preferred stock since July 31, 2003 and compound quarterly. The increase in dividends of $1.1 million in fiscal year 2006 compared to fiscal year 2005 is due to the compounding effect of accrued dividends.

          Net Loss to Common Stockholders.    The net loss to common stockholders decreased to $1.5 million in fiscal year 2006 from $23.4 million in fiscal year 2005, and the net loss per common share declined to $0.01 in fiscal year 2006 from $0.10 per share in fiscal year 2005. The weighted average number of Shares outstanding used to compute loss per share in fiscal years 2006 and 2005 was 226,587,304 and 224,764,006, respectively. The Company had 227,159,626 Shares outstanding as of January 31, 2006.

Fiscal Year 2005 Compared to Fiscal Year 2004

          Sales.    The following is a summary of the Company's revenues by geographic area:

          On a U.S. dollar basis, sales from European operations increased to $406.0 million in fiscal year 2005 from $346.1 million in fiscal year 2004, an increase of $59.9 million, or 17.3 per cent. Expressed in the local European currency (euros), fiscal year 2005 sales increased by 7.3 per cent, or the U.S. constant dollar equivalent of $25.1 million, from fiscal year 2004. The increase in sales was caused by a generally stronger economic climate in most European countries, with the exception of Germany, and an increase in air travel from prior year levels, which had been negatively affected by the SARS epidemic and the armed conflict in Iraq. Product sales increased in the luggage and structured bags category and the casual bag category. Hardside product sales declined by 4.1 per cent. Consumer preference in Europe continues to trend towards softside products. Two of our largest European customers, Gold-Krone and Karstadt, experienced financial difficulties during fiscal year 2005, which negatively impacted sales. We continue to sell to the individual members of the Gold-Krone buying group and Karstadt's situation has improved as a result of its financial restructuring initiatives.

          Sales from the North America operations increased to $343.0 million in fiscal year 2005 from $306.6 million in fiscal year 2004, an increase of $36.4 million, or 11.9 per cent. The increase was primarily due to an increase in U.S. Wholesale sales of $28.6 million, an increase in U.S. Retail sales of $6.1 million and an increase in Canada sales of $1.7 million. U.S. Wholesale sales increased to $203.5 million in fiscal year 2005 from $174.9 million in the prior year, an increase of 16.4 per cent. Prior year sales were negatively affected by a decrease in U.S. travel as a result of the armed conflict in Iraq. U.S. Wholesale sales were higher in the department store, mass merchant and specialty product channels and lower in the warehouse club channel. Sales in the U.S. Retail division increased to $123.1 million in fiscal year 2005 from $117.0 million in the prior year due to price increases associated with higher quality products, an improved mix of accessory related items, and increased advertising. In our company stores, same store sales for fiscal year 2005 increased by 5.4 per cent. Comparable store sales is calculated by dividing aggregate sales for stores open for each full month in the current year by aggregate sales for the same stores open for the corresponding full month in the prior year. Stores must be open for 13 months before they are included in the calculation. Relocated stores (within the same mall location) and remodeled stores are included in the computation of comparable store sales. When a store is closed, its sales are no longer included in the comparable store calculation. As of January 31, 2005, there were 182 company-owned retail stores, compared to 202 stores as of January 31, 2004.

          Sales from Asian operations increased to $99.0 million in fiscal year 2005 from $74.1 million in fiscal year 2004, an increase of $24.9 million or 33.6 per cent. The increase in sales is primarily due to higher sales in South Korea, Hong Kong and India. Sales in many areas of Asia in the prior year were adversely affected by the SARS epidemic scare. Asian sales growth also resulted from an increase in the number

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of retail stores and the introduction of new product lines during the year. In January 2005, we executed a joint venture agreement with a local partner in Japan to commence operations as a direct sales marketer in Japan. Previously the Japanese market was served under a license agreement with another luggage manufacturer.

          The increase in sales of Latin America to $36.1 million in fiscal year 2005 from $29.5 million in the prior year, or 22.4 per cent, was primarily due to improved Mexican, Brazilian and Argentine economies, expansion of direct sales efforts in several areas, and the success of new product developments.

          The decrease in licensing revenues of $1.4 million is primarily due to a non-recurring $1.8 million royalty received in the prior year upon the settlement of a trademark infringement action against a third party.

          Gross Profit.    The Company includes the following types of costs in cost of goods sold: direct product purchase and manufacturing costs, duties, freight-in, receiving, inspection, internal transfer costs, and procurement and manufacturing overheads. The Company includes the following types of costs in selling, general and administrative expenses, or SG&A: warehousing, order entry, billing, credit, freight-out, warranty, salaries and benefits of administrative and sales personnel, rent, insurance, taxes, office supplies, professional fees, travel, communications, advertising, investor relations, public company expenses and other expenses of a general and administrative nature not directly related to the cost of acquiring or manufacturing its products. Consolidated gross profit in fiscal year 2005 was $417.0 million, compared to $347.9 million in fiscal year 2004, an increase of $69.1 million. Consolidated gross margin as a percentage of sales increased by 1.4 percentage points to 46.2 per cent in fiscal year 2005 from 44.8 per cent in fiscal year 2004. Higher margins and gross profit in fiscal year 2005 compared to fiscal year 2004 were primarily due to (i) lower costs in Europe and Asia from the effect of a stronger European currency on product costs paid for in U.S. dollars, (ii) the continued effects of shifting production and product sourcing to lower cost countries, (iii) the reduction in fixed manufacturing costs through the Company's operational restructuring activities, and (iv) increased sales from Company-operated retail stores which carry higher margins. Also, in the fourth quarter of fiscal year 2005, the Company began an initiative with the goal of decreasing its number of worldwide inventory SKUs (stock keeping units) by 25 per cent by the end of fiscal year 2006. The goal of this initiative was to reduce warehousing costs and to improve and simplify product assortment and was substantially achieved in fiscal year 2006. Because the Company discounted these products more than historically required to sell excess inventories, an incremental obsolescence provision of approximately $3.9 million was recorded in the fourth quarter of fiscal year 2005. If actual demand or market conditions are less favourable than those projected by management, additional inventory write-downs may be required. The increase in gross profit was achieved despite the effect of higher oil prices during the year. Higher oil prices affect the cost of polypropylene (used in the manufacture of hardside luggage) and certain materials used in the manufacture of softside luggage.