* Backed by British private equity firm Doughty Hanson
* Shares priced above indicated range, rise as much as 59
By Tanya Agrawal and Ashutosh Pandey
April 19 Shares of high-end luggage maker Tumi
Holdings Inc soared in their market debut as investors
bet on a recovery in tourism and continued spending by its
Tumi's strong start as a public company mirrors the
impressive stock market debut of luxury brand Michael Kors
Holdings Ltd, whose stock has more than doubled in
value since it started trading on Dec. 15.
The luxury goods industry has been performing well despite
economic uncertainty around the world. Strong growth in emerging
markets and the tendency of increasingly affluent Asian shoppers
to buy luxury goods when on vacation have also boosted sales.
The upbeat market for pricey goods has prompted a spate of
initial stock offerings, including the $2.1 billion IPO of
Italian fashion house Prada SpA in Hong Kong and the
$487 million IPO of Italian luxury shoemaker Salvatore Ferragamo
Tumi priced 18.8 million shares at $18 per share on
Wednesday, raising $338.4 million. It had expected to sell its
shares for $15 to $17 each.
The maker of luggage, business cases and handbags is
benefiting from a resurgence in the travel industry, which had
suffered after the Sept. 11 attacks on the United States.
"Tumi commands great brand loyalty and has done an amazing
job when it comes to selling directly to customers," said
Marshal Cohen, NPD Group's chief retail industry analyst.
"Tumi's use of e-commerce and social commerce to sell their
products is where we'll really see the growth story."
The IPO allowed British private equity firm Doughty Hanson
to reduce its stake in the luxury bags maker to about 60.7
Doughty Hanson, which previously owned 84.3 percent of
Tumi's stock, is also an investor in Netherlands-based maker of
activated carbon, Norit NV, which has filed to go public in the
For a Breakingviews column on Tumi -
Tumi competes directly with the world's biggest luggage
maker, Samsonite International SA, which tried to buy
the company early this year, according to media reports.
Other competitors include Burberry, Dunhill, Gucci,
Louis Vuitton and Montblanc.
"The company caters to an elite clientele, who can afford up
to $2,000 individual luggage ... the company will only grow,"
said Scott Sweet, senior managing partner at IPO Boutique.
Tumi has retail stores at premium retail venues across the
globe including New York, Paris, London, Rome, Tokyo, Moscow and
Milan and plans to open eight to 16 stores over the next three
The company's net sales rose 31 percent to $330 million in
2011. Net income rose to $16.6 million from $104,000.
Goldman Sachs, JPMorgan and Credit Suisse were the main
underwriters of the offering.
Shares of the South Plainfield, New Jersey-based company
closed up 47 percent at $26.50 on the New York Stock Exchange on