914478--5/16/2006--SAMSONITE

related topics

{customer, product, revenue}

{debt, indebtedness, cash}

{product, market, service}

{condition, economic, financial}

{provision, law, control}

{personnel, key, retain}

{property, intellectual, protect}

{cost, operation, labor}

{competitive, industry, competition}

{system, service, information}

{cost, contract, operation}

{control, financial, internal}

{operation, international, foreign}

{acquisition, growth, future}

{stock, price, operating}

Events which negatively affect consumer travel levels, or a downturn in the economy, negatively affect our business. Our inability to respond to changes in consumer demands and market trends could adversely affect our sales. Our ability to continue our sales growth is dependent upon the further implementation of our growth strategies, which we may not be able to sustain. Part of our retail strategy relies upon our ability to lease quality locations at competitive prices. We may incur significant costs if our retail strategy fails and we are forced to close retail locations. We must be able to maintain effective distribution channels that serve our customers purchasing patterns, and satisfactory control of our wholesale and license distribution channels is critical. Some of our product lines are manufactured under licensed trademarks and any failure to retain or renew such licenses on acceptable terms may have an adverse effect on our business. Brand recognition and image are important to the success of companies in our industry. We may not be able to realize the cost-saving benefits associated with the use of overseas third party vendors, and our vendors may be unable to deliver products in a timely cost-effective manner or to meet our quality standards. We are dependent on our trademarks and patents, and our products are and may continue to be the subject of counterfeit reproduction. The luggage market is highly fragmented; we face competition from many smaller competitors. Failure to attract and retain key and qualified personnel may adversely affect our ability to conduct our business. Certain corporate transactions require the approval of our major stockholders. The business of our subsidiaries with international operations may be adversely affected by international business risks and fluctuations in currency exchange and translation rates. Any material weaknesses in our internal control over financial reporting could result in a misstatement in our financial statements. Our business may be adversely affected if we encounter complications in connection with our implementation of SAP information management software. If interest rates rise, our operating results may decline due to higher borrowing costs. We have a leveraged capital structure which could adversely affect our financial health, our ability to service our indebtedness and to grow our business. We are subject to restrictive covenants imposed by our existing credit facility, by the indentures governing notes we have issued and by an agreement we are party to with Pension Benefit Guaranty Corporation. The indentures governing our senior and senior subordinated notes contain change of control provisions that could discourage a proposal for a takeover of us. We have significant underfunded and unfunded U.S. post-retirement obligations, which could adversely affect our liquidity.

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914478--5/16/2006--SAMSONITE_CORP/FL