* Company using bankruptcy to close half of its stores
* Samsonite Corp not part of filing
* Creditors to be paid in full, to emerge in 45-90 days
By Tom Hals
WILMINGTON, Del., Sept 2 The retailing business
of Samsonite Corp, the world's top luggage maker, filed for
bankruptcy on Wednesday as part of a reorganization aimed at
closing roughly half of its 173 U.S. stores.
Samsonite Company Stores LLC said its Chapter 11 filing is
aimed at focusing the business on its outlet stores, which have
fared better during a steep drop in consumer spending on travel
Under the company's prepackaged reorganization, creditors
will be paid in full and Samsonite Corp will remain the owner
of the retail business. It expects to emerge in as little as 45
"The recession has caused a severe decline in consumers
purchasing travel-related goods and the company has responded
to this critical situation with a substantial restructuring
program," said Kyle Gendreau, the treasurer of Samsonite
Company Stores and chief financial officer of Samsonite Corp.
Samsonite Corp has not filed for bankruptcy, although the
filing by its retail operations is part of the parent company's
Samsonite Corp was bought by funds managed by CVC Capital
Partners, a private equity firm, in 2007 for $1.7 billion.
The new owners expanded the number of Samsonite's
full-price stores, a move that disappointed investors as the
U.S. economy slid into a recession.
By filing for bankruptcy, the company will be able to break
its lease commitments and close as many as 83 stores.
The company employs about 650 and had annual sales of
$108.1 million in 2008. It said in court documents it had $233
million in assets and $1.5 billion in liabilities, largely a
result of its role as guarantor on Samsonite Corp debt.
The bankruptcy follows a string of retailer failures,
including Eddie Bauer Holdings, while a sharp downturn in
travel and leisure spending has sent casinos, airlines and
resorts into bankruptcy.
(Reporting by Thomas Hals; Editing by Derek Caney)