Samsonite shares drop 16 percent on HK report of chemicals in handles
HONG KONG |
HONG KONG (Reuters) - Shares of Samsonite International (1910.HK), the world's biggest luggage maker, fell more than 16 percent on Friday after Hong Kong's consumer products watchdog said it found parts of certain suitcases containing high levels of chemicals that may be carcinogenic.
Hong Kong's Consumer Council said in a statement on Friday that excessive levels of polycyclic aromatic hydrocarbons (PAHs) had been found in the handles of four samples of the company's suitcases. The amounts exceeded the limits set by a German voluntary labeling scheme on consumer plastic products, it said.
Samsonite issued a statement late on Friday that said the company's Tokyo Chic, Cubelite and Westlake luggage - the items referenced in the Council report - were "completely safe."
"Based on the independent test results as well as on specialist expert opinion, we are absolutely confident that consumers can continue to use our luggage without any safety or health concerns at all," Ramesh Tainwala, President, Asia-Pacific & Middle East, said in the statement.
"We do not anticipate this incident having any material impact on our results whatsoever."
The Council said a research and testing unit conducted tests on 19 models, with prices ranging from HK$350 to HK$5,100 ($660).
"The Customs and Excise Department has advised the agent for the suitcases of which the handles are found with high PAHs to stop the sales of the concerned model and to replace the handles," the Council said.
For the full statement, click: r.reuters.com/gyt78s
Research reports indicate that PAHs can cause cancer. They are released into the environment through the burning of coal, crude oil and refined oil products.
Samsonite, based in Luxembourg and listed in Hong Kong, makes luggage, business bags and travel accessories aimed at the mid-to-upper end of the market.
The stock fell as low as HK$12.02, the lowest since February 1. The shares ended at HK$12.12 on Friday, still down 16.1 percent, compared with a 2.26 percent gain in the benchmark Hang Seng Index .HSI.
Samsonite, among the world's best known luggage brands, went public on the Hong Kong stock exchange last year, listing on June 16. The IPO was priced at HK$14.50, and struggled immediately after it began trading.
The company, named after the biblical figure, aimed to tap China's growth as part of its move to list in Asia.
(Reporting by Donny Kwok and Tan Ee Lyn; Editing by Michael Flaherty and Muralikumar Anantharaman)
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