Tumi Files to Raise $300 Million in Initial Public Offering

Tumi Holdings Inc., the designer of black-nylon luxury travel bags, is seeking as much as $300 million in an initial public offering as retailers of higher-priced goods outpace the rest of the industry.

The company didn’t specify the number or price of shares it will offer in a regulatory filing today. The offering size is a placeholder amount used to estimate registration fees and may change.

Tumi surpassed $220 million in sales in the first nine months of the year, selling items such as garment bags and suitcases through about 1,600 locations worldwide. The company, founded in 1975, may more than triple its stores “over the long term,” adding locations in upscale malls and street venues, according to the filing.

“Tumi will do well because it’s very clear in the public markets that the luxury brands have been doing very well the past couple quarters,” said Pam Danziger, president at Unity Marketing, a Stevens, Pennsylvania-based luxury market research firm. “Investors know there’s a huge difference between luxury customers and their expenditures and the general population.”

Sales at U.S. luxury stores open at least a year will climb 7.5 percent, faster than the 6.7 percent gain in November and December of 2010, according to the International Council of Shopping Centers. Other retail groups will post slower or unchanged sales growth, the New York-based trade group said last month.

Improving Economy

Luxury customers are spending more on signs of an improving U.S. economy, including gains in same-store sales nearly every month this year, stabilizing home prices and moderating inflation, Danziger said. Even in tough times, luxury-goods shoppers typically are in an income bracket less affected by economic concerns such as unemployment or surging gasoline costs, she said.

Samsonite International SA, which Tumi lists as a competitor, sold shares to the public in a Hong Kong IPO in June, raising about $1.3 billion after pricing at the bottom of a revised range. Tumi announced the IPO during what may be the biggest week for U.S. IPOs in nine months. Eleven companies, including game maker Zynga Inc. and Michael Kors Holdings Inc., are seeking as much as $3.8 billion in U.S. IPOs this week, the most since March.

Last week, Hong Kong-based Chow Tai Fook Jewellery Group Ltd. priced its HK$15.8 billion initial offering at the bottom of its proposed range. Lack of demand for that offering may signal a less welcome environment for Tumi’s sale, said Tim Cunningham, who helps oversee about $74 billion at Thornburg Investment Management Inc. in Santa Fe, New Mexico.

“It’s going to be a little tougher than it would have been a few months ago,” Cunningham said.

Narrower Loss

Chow Tai Fook’s shares are set to start trading on Dec. 15, Bloomberg data show. Samsonite’s stock has sunk 24 percent since its IPO, valuing the company at about 15 times projected 2011 earnings. The company reported $1.2 billion in revenue for the first nine months of the year.

Tumi, based in South Plainfield, New Jersey, booked net income of $3.1 million in the nine months through Sept. 25, compared with a loss of $6.4 million a year earlier, according to its filing.

Existing holders may sell shares in the IPO, the prospectus shows. Chief Executive Officer Jerome Griffith is the biggest individual shareholder, with a stake of 3.6 percent.

Doughty Hanson & Co. took over Tumi in 2004. Tumi plans to use the proceeds of the offering to repurchase outstanding stock from the London-based buyout firm, according to the filing. A spokesman at Doughty Hanson wasn’t immediately able to comment on the use of the proceeds.

Goldman Sachs Group Inc. and Credit Suisse Group AG are managing the sale. The shares will trade under the symbol TUMI.

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