Luxury luggage and accessories brand Samsonite shares took a giant tumble on their debut at the Hong Kong Stock Exchange on investor concern about the strength of the global economic recovery. Its shares fell by as much as 10% inearly morning trade to HK$12.96 from an offer price of HK$14.50
The company had raised $1.25bn (£771m) via an initial public offering (IPO). Samsonite is the latest big brand to list in Hong Kong in order to tap into the lucrative Chinese market.
The Italian fashion house Prada is due to price its IPO on Friday and make its trading debut on June 24.
However, recent IPOs have struggled. Samsonite's fall comes even thought it priced its flotation at the lower end of a proposed range.
Earlier this month Australian mining company Resourcehouse dropped its Hong Kong IPO plans because of a poor response from investors.
Meanwhile, companies including MGM China and commodities trader Glencore have also had muted debuts on the stock exchange.
"Of course you have to attribute that to the weak sentiment in the market and in the meantime people won't be too interested in IPOs," said Alex Wong of Ample Finance Group. Debt payment
Despite the poor debut, the money raised by the flotation will allow Samsonite's owners - private equity group CVC and Royal Bank of Scotland - to pay off debt.
CVC bought Samsonite in 2007 for $1.7bn at the height of the credit boom. But the company struggled when travel was hit by the financial crisis and Royal Bank of Scotland ended up taking a 30% stake as part of a debt restructuring.
The company is betting on growth in Asia, where leisure travel is becoming increasingly affordable.
Samsonite was founded by US trunk maker Jesse Shwayder in Denver, Colorado, in 1910.
One of his first cases was called Samson, after the biblical figure known for his strength, and was designed to withstand the hardships of travelling through America's West.
Image: Viktor & Rolf for Samsonite