Samsonite International SA (1910), the world’s largest branded-luggage maker, jumped the most in eight months in Hong Kong trading after the company said its brands were safe following a report some models contained carcinogens.
Shares of the Mansfield, Massachusetts-based company dropped 16 percent on June 15 after Choice Magazine, a monthly publication of the Hong Kong Consumer Council, reported that handles of some Samsonite luggage contained materials which could cause cancer. The luggage maker said independent tests showed they were safe to use, and that it withdrew its Tokyo Chic model from Hong Kong outlets to “allay any concerns that consumers may have.”
“We think this could be a good entry opportunity” with the stock cheap after the decline on June 15, Barclays Plc analysts Phoebe Tse and Vineet Sharma said in a note. “The main risk we see is whether a significant amount of negative media reporting that would impact customer purchases may follow.”
The magazine, which had mentioned the Tokyo Chic, Cubelite and Westlake lines, had said the immediate danger is minimal.
Samsonite sent random samples of the products to laboratories in Germany and Hong Kong to assess the levels of Polycyclic Aromatic Hydrocarbons in the handles, it said in a statement to the Hong Kong Stock Exchange today. The test results found levels that were “significantly lower” than those reported by the consumer council, Samsonite said. It had said June 15 independent tests showed the luggage models were safe to use.
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