SAMSONITE CORP/FL, 424A, 1997-01-08

SAMSONITE CORP/FL
424A, 1997-01-08
LEATHER & LEATHER PRODUCTS

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<PAGE>
Filed Pursuant to Rule 424(a)
Registration No. 333-18405

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JANUARY 7, 1997

PROSPECTUS
7,823,156 SHARES

[LOGO OF SAMSONITE(R) APPEARS HERE]
COMMON STOCK
-----------
Of the 7,823,156 shares of common stock, par value $.01 per share (the
"Common Stock"), of Samsonite Corporation (the "Company" or "Samsonite")
offered hereby, 3,000,000 shares are being offered by the Company and 4,823,156
shares are being offered by certain stockholders of the Company (the "Selling
Stockholders"). The Company will not receive any of the proceeds from the sale
of shares by the Selling Stockholders. See "Principal and Selling
Stockholders." Of the 7,823,156 shares of Common Stock being offered hereby,
6,258,525 shares are being offered in the United States and Canada (the "U.S.
Offering") and 1,564,631 shares are being offered outside the United States and
Canada (the "International Offering"). See "Underwriting."

On January 6, 1997, the last reported sale price of the Common Stock, which
is traded on the Nasdaq National Market under the symbol "SAMC", was $40 per
share. See "Price Range of Common Stock."

SEE "RISK FACTORS," BEGINNING ON PAGE 11, FOR A DISCUSSION OF CERTAIN FACTORS
WHICH SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SECURITIES OFFERED
HEREBY.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share................ $ $ $ $
- --------------------------------------------------------------------------------
Total(3)................. $ $ $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended (the "Securities Act"). See
"Underwriting."
(2) Before deducting expenses of the Offerings payable by the Company estimated
at $1,200,000.
(3) The Company and the Selling Stockholders collectively have granted the U.S.
Underwriters and International Managers options, exercisable within 30
days, to purchase up to an additional 625,852 and 156,463 shares of Common
Stock, respectively, solely to cover over-allotments, if any. If such
options are exercised in full, the total Price to Public, Underwriting
Discount, Proceeds to Company and Proceeds to Selling Stockholders will be
$ , $ , $ and $ , respectively. See "Underwriting."
-----------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Underwriters reserve the right to withdraw, cancel or
modify such offer and to reject any order in whole or in part. It is expected
that delivery of the shares of Common Stock will be made in New York, New York
on or about , 1997.
-----------
MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.
-----------
The date of this Prospectus is , 1997.
<PAGE>

Inside Front Cover:

"Samsonite...
A leader in luggage innovation"

"Samsonite...
Global family of brands"

"Locations throughout the world including
the emerging markets in Signapore, China
and India"

[Photographs of various Company products -- suitcases, garment bags
and business cases -- and Samsonite, American Tourister
and Lark brand logos.]
<PAGE>

IN CONNECTION WITH THE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

----------------

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act") are incorporated herein by reference
and made a part hereof:

1. The Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1996;

2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
April 30, 1996, July 31, 1996 and October 31, 1996;

3. The Company's reports on Form 8-K dated February 5, 1996 and November 8,
1996;

4. The description of the Common Stock incorporated by reference in the
Company's Registration Statement on Form 8-A dated June 14, 1994; and

5. All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the Offerings of the shares
of Common Stock.

The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of any such person, a copy of any or all of the
documents which are incorporated herein by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated to
reference into such documents). Requests should be directed to the Company,
11200 East 45th Avenue, Denver, Colorado 80239, Attention: Corporate
Secretary, telephone (303) 373-2000.

----------------

Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

3
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus or
incorporated herein by reference. Unless the context otherwise requires, all
references herein to the "Company" and "Samsonite" are to Samsonite
Corporation, a Delaware corporation, and its consolidated subsidiaries.

THE COMPANY

Samsonite is one of the world's largest manufacturers and distributors of
luggage. The Company markets its products primarily under the SAMSONITE(R),
AMERICAN TOURISTER(R) and LARK(R) brand names. The Samsonite brand enjoys
worldwide recognition and is the leading brand of luggage products in the
United States and Europe. American Tourister is the second most recognized
brand of luggage in the United States. Following the Company's acquisition of
American Tourister, Inc. ("American Tourister") in 1993, the Company introduced
the American Tourister brand in Europe. The Lark brand is well-recognized in
the United States and competes in the premium segment of the luggage market.
Samsonite and American Tourister luggage products have been manufactured and
sold continuously since the 1930's.

With sales of $722.6 million for the twelve months ended October 31, 1996,
the Company is a major factor in the worldwide luggage market. Competition in
the luggage market is highly fragmented with the vast majority of individual
competitors having less than 10% of the Company's annual luggage sales.
Samsonite offers the broadest range of products in the luggage industry,
including hardside suitcases, softside suitcases, garment bags, casual bags,
hardside and softside business cases and other travel bags. Many of today's
most successful luggage products and features--such as suitcases with a built-
in luggage cart; full-featured, structured garment bags; ultra-light, softside
suitcases; and innovative wheel systems--were introduced and popularized by
Samsonite. Hardside suitcases accounted for approximately 32% of the Company's
sales in fiscal 1996. As a result of recent improvements in Samsonite's
proprietary molding technology and design, the Company soon will be able to
offer to consumers who prefer the greater protection and security of hardside
luggage, hardside suitcases that are lighter in weight and comparable to
softside products in terms of interior organization features. Softside products
(excluding business cases), which accounted for approximately 53% of the
Company's sales in fiscal 1996, appeal to consumers because of their light
weight, flexibility and convenience for a variety of purposes.

The Company's products are sourced through a global network consisting of 13
Company-operated manufacturing facilities and various third-party suppliers
throughout the world. By operating its own facilities to produce hardside
luggage and more complex softside products, the Company is better able to
control manufacturing quality and to achieve shorter product introduction lead
times and lower delivery costs. In addition, the Company takes advantage of its
global sourcing capabilities by opportunistically buying basic products from
various countries when their product costs or exchange rates are particularly
favorable. The Company produces substantially all of its hardside products in
Company-operated plants in the United States, Belgium and France. Approximately
54% of the Company's softside products are sourced from qualified vendors
located principally in the Far East, Eastern Europe and the Dominican Republic,
with the balance produced by the Company in the United States, Belgium, Italy,
Mexico, Spain and Hungary.

The Company's marketing and distribution strategy focuses on the broad middle
segment of the luggage market. In the United States, the Samsonite brand has
historically been positioned as high quality, innovative luggage, targeted at
frequent business travelers; the American Tourister brand has been positioned
as quality luggage at an affordable price; and the Lark brand has been
positioned as premium luggage targeted at first and business class travelers.
In Europe, the Samsonite brand enjoys more of a premium image than in the
United States, and is targeted at first class and frequent business travelers.

4
<PAGE>

The Company's products are sold throughout the world in more than 100
countries through approximately 23,000 retail outlets, including department and
specialty stores, catalog showrooms, mass merchant retailers and warehouse
clubs. As of November 30, 1996, the Company also distributed products through
147 Company-owned retail stores in the United States and two Company-owned
premium luggage stores in Europe. In addition, Samsonite licenses its trademark
for use on non-luggage products such as travel accessories, personal leather
goods, handbags and furniture. These products are made and sold primarily by
independent licensees which pay royalties to Samsonite.

BUSINESS STRATEGY AND NEW GROWTH INITIATIVES

Management believes that the Company's leading position in the global luggage
industry is due to its widely recognized brand names, broad range of innovative
luggage products and global manufacturing and distribution network. In
addition, the substantial cash flow generated by the Company is available for
investments in product development, advertising and marketing.

With the hiring of a new chief executive officer in May 1996, the Company
began implementation of a series of strategic initiatives intended to improve
Samsonite's economic performance and strengthen its leadership position in the
worldwide luggage market. The Company's key strategies to increase revenue and
net income and realize the full potential of Samsonite's global brands include
the following:

. IMPROVED MANAGEMENT TEAM AND ORGANIZATIONAL STRUCTURE. Samsonite has
formed a new management team which consists of Company veterans with
extensive luggage experience and new managers who have broad experience
in the marketing of branded consumer products as well as successful track
records at other globally branded consumer products companies. See
"Management." This management team is now leading a more streamlined and
effective category-based organization. This organizational structure is
designed to manage the Company's business around two product categories--
hardside and softside luggage--as opposed to focusing separately on the
Company's three key brands. In the Americas, these categories are
supported by a separate sales and distribution function.

. IMPROVE THE COST STRUCTURE AND WORK PRACTICES. Samsonite is moving
aggressively to make further changes which will reduce staffing levels as
well as improve systems and controls to reduce costs, while achieving
greater effectiveness. During 1996, the Company announced two
restructuring programs designed to achieve the consolidation of American
Tourister and to effect other consolidations and staffing reductions
relating principally to the change to a category-based management
structure. Management estimates that these restructurings will yield
approximately $16 million of annual cost reductions by the fourth quarter
of fiscal 1998. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations." In addition, the Company has
created a new organization for sourcing products and raw materials on a
global basis and is in the process of standardizing products and
components worldwide. These sourcing and standardization actions are
designed to simplify operations and are expected to yield additional cost
reductions.

5
<PAGE>

throughout the Company's worldwide markets. For example, during fiscal
1997, Samsonite introduced the EZ CART(TM) suitcase, a new concept in
softside luggage, in the United States simultaneously across the
Samsonite, American Tourister and Lark brands. This new product is an
upright, softside suitcase with a balanced, four-wheel system designed to
be more maneuverable with less effort, and to take the weight off the
traveler's arm and transfer it to the floor. The EZ CART(TM) product is
expected to be introduced in Europe and the Far East within the next six
to nine months.

. ACCELERATE SALES GROWTH. In addition to exploiting Samsonite's new global
product architecture to more quickly and cost effectively introduce new
consumer-preferred features and product designs across all brands
worldwide, the Company has developed a number of additional initiatives
intended to accelerate profitably the Company's revenue growth:

. Expand Product Offerings In Casual and Business Bag Segments. The new
global product architecture will include more entries in casual bags
and business cases to expand the Company's sales in these two growth
categories. This strategy has already proven to be successful for
Samsonite in Europe and Japan.

. Strengthen Marketing. Samsonite plans to expand its presence in the
worldwide luggage market from both a consumer and trade standpoint
through improved consumer marketing. This marketing program is
expected to include more consumer-preferred products, styles and
features, more effective global advertising at higher investment
levels, strengthened point-of-sale support and better customer
service. In connection with its shift to a category-based management
structure, for the first time in November 1996, advertisements
introducing the EZ CART(TM) suitcase in the United States identified
Samsonite, American Tourister and Lark as a family of brands, each
offering a version of this innovative new product.

. Broaden Channels of Distribution. The Company plans to increase its
presence in channels of distribution in which it believes it is under-
represented by using targeted marketing and sales efforts tailored to
each channel of distribution. In addition, the Company intends to
exploit its manufacturing and sourcing leverage by aggressively
pursuing opportunities to sell American Tourister and retailer-labeled
products in mass retailers and other high volume potential channels
throughout the world.

. Continue Worldwide Expansion. The Company plans to continue expansion
worldwide in countries where growing economies and reduced political
and trade barriers provide opportunities for long-term growth.
Samsonite currently is expanding its presence in emerging foreign
markets, including markets in China, India, South America and the
Pacific Rim. In the first quarter of fiscal 1997, a joint venture with
a local partner to distribute Samsonite products in Singapore and
Malaysia began operating successfully. In addition, through joint
ventures with local partners in India and China, the Company plans to
manufacture and distribute Samsonite products in these countries
beginning in fiscal 1998. The Company is also currently negotiating
with its Argentine distributor to form a joint venture to manufacture
and distribute Samsonite products in Brazil and other major South
American markets beginning in fiscal 1998.

. Accelerate Company-owned Retail Store Sales Growth. The Company
intends to increase its retail outlets as well as broaden and
strengthen its retail operations. In October 1996, Samsonite began
marketing all three of the Company's key brands throughout its
Company-owned luggage stores in the United States which had previously
sold only American Tourister luggage. In addition, Samsonite is
adopting best operational and merchandising practices designed to
reduce costs and increase sell-through. Sales have continued to
accelerate in the Company's retail operations, thereby increasing
positive operating cash flow.

6
<PAGE>

. IMPROVE RETURN ON EQUITY AND CONTINUE TO STRENGTHEN THE BALANCE
SHEET. The Company has implemented a comprehensive strategy to reduce
leverage and improve return on equity, including the possible divestiture
of various non-core assets. To better manage working capital, the Company
is negotiating new extended payment terms with most of its major vendors,
accelerating the collection of accounts receivable, and reducing
inventory levels through stock keeping unit ("SKU") reductions, as well
as better requirements forecasting. The net proceeds from the sale of
shares being offered by the Company hereby, as well as the anticipated
asset sales and reductions in working capital requirements will be used
to reduce debt and, in turn, debt service expense. See "Use of Proceeds."
The Company expects these actions, combined with the other strategic
initiatives, to result in an improved return on equity in fiscal 1998.

THE OFFERINGS

The offering of 6,258,525 shares of Common Stock initially being offered in
the U.S. Offering and the offering of 1,564,631 shares initially being offered
in the International Offering are collectively referred to as the "Offerings."

<TABLE>
<S> <C>
Common Stock offered by
the Company(1):
U.S. Offering........... 2,400,000 shares
International Offering.. 600,000 shares
----------------
Total................. 3,000,000 shares
================
Common Stock offered by
the Selling
Stockholders(1):
U.S. Offering........... 3,858,525 shares
International Offering.. 964,631 shares
----------------
Total................. 4,823,156 shares
================
Common Stock to be out-
standing after the Offer-
ings(1)(2)............... 19,988,051
Use of proceeds........... Assuming an offering price of $37.50 per share, the
estimated net proceeds from the sale of the Common
Stock offered by the Company in the Offerings will
be approximately $105.7 million and will be used to
repay indebtedness. See "Use of Proceeds." The
Company will not receive any of the proceeds from
the sale of shares of Common Stock offered by the
Selling Stockholders.
Listing................... The Common Stock is quoted on the Nasdaq National
Market under the symbol "SAMC".
</TABLE>
- --------
(1) Assumes no exercise of the Underwriters' over-allotment options.
(2) Includes the exercise, in connection with the Offerings, of all outstanding
stock options held by Steven J. Green. See "Capitalization" and "Principal
and Selling Stockholders." Does not include (i) 2,547,772 shares issuable
upon exercise of outstanding stock options at a weighted average exercise
price of $24.38 per share, (ii) 116,667 shares issuable under stock award
agreements or (iii) 625,877 additional shares reserved for issuance
pursuant to the Company's Amended and Restated 1995 Stock Option and
Incentive Compensation Plan and Directors' Stock Plan.

RISK FACTORS

See "Risk Factors" for a discussion of certain risks that should be
considered in connection with an investment in the Common Stock offered hereby.

7
<PAGE>

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

The following table presents summary consolidated financial information
derived from the Company's audited consolidated financial statements as of and
for the years ended January 31, 1996 and 1995, the seven months ended January
31, 1994, the five months ended June 30, 1993, and the years ended January 31,
1993 and 1992, which have been restated for discontinued operations, and the
Company's unaudited consolidated financial statements as of and for the nine
months ended October 31, 1996 and 1995. The summary financial information
presented below should be read in conjunction with the other information
contained under the captions "Capitalization," "Selected Historical and Pro
Forma Consolidated Financial Data," "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and with the consolidated
financial statements and related notes included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
------------------------------------------------------------- ------------------
1992 1993 1994(1) 1995 1996 1995 1996
---------- ---------- ---------- --------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net Sales(2)........................... $ 421,461 $ 480,630 $ 523,619 $ 635,452 $675,209 $505,707 $553,124
Cost of Goods Sold..................... 250,894 280,051 309,809 373,967 414,691 307,458 335,363
---------- ---------- ---------- --------- -------- -------- --------
Gross Profit........................... 170,567 200,579 213,810 261,485 260,518 198,249 217,761
Selling, General and
Administrative Expenses(3)............ 124,787 146,211 163,574 197,716 203,701 153,197 174,140
Amortization of Intangibles(4)......... 441 466 40,130 67,189 63,824 47,863 29,622
Provision for Restructuring
Operations............................ -- -- -- -- 2,369 -- 10,670
---------- ---------- ---------- --------- -------- -------- --------
Operating Income (Loss)................ 45,339 53,902 10,106 (3,420) (9,376) (2,811) 3,329
Interest Income........................ 1,309 -- 4,342 2,909 4,709 4,058 1,172
Other Income (Expense)................. (1,813) (2,421) 5,864 2,729 3,967 3,357 18,453
Interest Expense and
Amortization of Premium and
Issue Costs of Debt(5)................ 214,957 103,871 29,243 37,875 39,974 30,851 27,112
Reorganization Items................... 8,949 (415) 462,447 -- -- -- --
Income Tax Expense..................... 1,630 12,991 9,110 10,619 9,095 7,495 8,603
Minority Interest in
Earnings of Subsidiaries.............. (2,510) (2,293) (2,049) (931) (1,385) (428) (852)
---------- ---------- ---------- --------- -------- -------- --------
Income (Loss) from Continuing
Operations............................ (165,313) (68,089) 442,357 (47,207) (51,154) (34,170) (13,613)
Income (Loss) from Operations
Discontinued and Sold, Cumulative
Effect of Change in Accounting
Principles and Extraordinary
Items................................. 296,401 112,108 430,946 (64,372) (10,293) (8,042) --
---------- ---------- ---------- --------- -------- -------- --------
Net Income (Loss)...................... $ 131,088 $ 44,019 $ 873,303 $(111,579) $(61,447) $(42,212) $(13,613)
========== ========== ========== ========= ======== ======== ========
Loss per Share from Continuing
Operations............................ $ (3.05) $ (3.24) $ (2.16) $ (.85)
========= ======== ======== ========
Net Loss per Share..................... $ (7.22) $ (3.89) $ (2.68) $ (.85)
========= ======== ======== ========
OTHER DATA:
Operating Income (Loss)................ $ 45,339 $ 53,902 $ 10,106 $ (3,420) $ (9,376) $ (2,811) $ 3,329
Fresh Start Amortization and
Depreciation(4)....................... -- -- 41,968 70,599 66,433 50,167 31,607
Other Amortization and Depre-
ciation............................... 10,637 11,941 13,056 14,887 17,668 12,545 14,630
---------- ---------- ---------- --------- -------- -------- --------
Operating Cash Flow(6)................. $ 55,976 $ 65,843 $ 65,130 $ 82,066 $ 74,725 $ 59,901 $ 49,566
========== ========== ========== ========= ======== ======== ========
Operating Cash Flow Adjusted
for the Effects of
Restructuring and Management
Changes(3)(6)......................... $ 65,130 $ 82,066 $ 77,094 $ 59,901 $ 64,436
========== ========= ======== ======== ========
Capital Expenditures................... $ 18,242 $ 11,296 $ 13,095 $ 18,453 $ 23,975 $ 15,909 $ 19,689
BALANCE SHEET DATA (AS OF END OF PERIOD):
Property, Plant and Equipment, Net..... $ 106,918 $ 101,581 $ 131,894(7) $ 137,686 $140,912 $148,800 $138,170
Total Assets........................... 757,667 825,970 1,111,735(7) 866,000 621,443 678,695 598,504
Long-Term Obligations (including
current installments)................. 1,330,160(8) 1,579,447(8) 573,197(9) 417,175 310,959 305,414 292,642
Stockholders'
Equity (Deficit)...................... (960,097) (923,833) 253,693(9) 148,472 25,116 49,177 20,824

</TABLE>

(see footnotes beginning on page 10)

8
<PAGE>

IMPACT OF FAIR VALUE ADJUSTMENTS ATTRIBUTABLE TO THE REORGANIZATION OF ASTRUM,
RESTRUCTURINGS AND CERTAIN OTHER EXPENSES:

Included in the Company's statements of operations are amortization and
depreciation related to adjustments of assets and liabilities to fair value in
connection with the adoption of the American Institute of Certified Public
Accountants Statement of Position 90-7 entitled "Financial Reporting by
Entities in Reorganization under the Bankruptcy Code" ("SOP 90-7"). The most
significant adjustment related to reorganization value in excess of
identifiable assets which was amortized over the three-year period ended June
1996. In addition, the Company's statements of operations include provisions
for restructuring operations and certain other expenses associated with the
restructurings and management team changes. Such other expenses include those
incurred for consulting services in connection with establishing the
restructuring plan, the cessation of the former chief executive officer's
employment, the hiring of new and additional members of the executive
management team, and for expenses incurred in excess of the original provision
for the consolidation of American Tourister manufacturing facilities. Due to
the significance of these items, management believes that it is useful to
isolate their impact on the statements of operations as shown below. This
information does not represent and should not be considered an alternative to
net income, any other measure of performance as determined by generally
accepted accounting principles or as an indicator of operating performance.

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
------------------------------ ------------------
1994
(AS COMBINED) 1995 1996 1995 1996
------------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Fresh Start Amortization
and Depreciation.......... $41,968 $70,599 $66,433 $ 50,167 $31,607
Provision for Restructuring
Operations................ -- -- 2,369 -- 10,670
Certain Other Expenses
Associated with the
Restructuring and
Management Changes(3)..... -- -- -- -- 4,200
Tax Benefit................ (4,035) (6,366) (5,629) (2,995) (9,648)
------- ------- ------- -------- --------
After-Tax Impact on Net
Loss...................... $37,933 $64,233 $63,173 $ 47,172 $36,829
======= ======= ======= ======== ========
Impact on Net Loss Per
Share..................... $ 4.15 $ 4.00 $ 2.99 $ 2.31
======= ======= ======== ========
</TABLE>

(see footnotes on following page)

9
<PAGE>

- --------

(1) In June 1993, the Company, then known as Astrum International Corp.
("Astrum"), completed a financial restructuring pursuant to a plan of
reorganization under Chapter 11 of the United States Bankruptcy Code (the
"Plan"). Effective June 30, 1993 and pursuant to SOP 90-7, the Company was
required to adjust its assets and liabilities to their fair ("fresh
start") values and create a new entity for financial reporting purposes.
For purposes of this presentation and in order to compare full fiscal
years, the results for the five months ended June 30, 1993 and the seven
months ended January 31, 1994 have been combined. Due to the effect of SOP
90-7, amortization of intangibles and interest expense (see note (4) below
and note (1) to the "Selected Historical and Pro Forma Consolidated
Financial Data") for the periods before and after June 30, 1993 are not
comparable. See "Selected Historical and Pro Forma Consolidated Financial
Data" for a presentation of separate results for such five and seven month
periods in accordance with SOP 90-7.
(2) The Company acquired American Tourister in August 1993. Net sales for the
combined year ended January 31, 1994 include net sales of $47.7 million of
American Tourister for five months. Net sales for the fiscal year ended
January 31, 1995 and 1996 include net sales of $117.8 million and $115.0
million, respectively, of American Tourister for 12 months.
(3) Selling, general and administrative expenses include $4.2 million of
expenses during the nine months ended October 31, 1996 for consulting fees
to establish the restructuring plan ($0.8 million), for the cessation of
the former chief executive officer's employment and the change in
management ($2.9 million), and for expenses in excess of the original
provision in fiscal 1996 for the consolidation of American Tourister
manufacturing facilities ($0.5 million).
(4) As discussed in note (1) above, the Company adjusted its assets and
liabilities to their fresh start values effective June 30, 1993. Since
June 30, 1993, the Company's statements of operations include amortization
and depreciation related to these fresh start adjustments. The most
significant fresh start adjustment relates to recording Reorganization
Value in Excess of Identifiable Assets, which was amortized over a three-
year period ending in June 1996. In addition, fresh start amortization
includes amortization of fresh start adjustments to reflect the fair value
of trademarks, licenses, patents and other intangibles, which are being
amortized over periods from one to forty years. Fresh start amortization
and depreciation also includes depreciation of fresh start adjustments to
reflect the fair value of property and equipment, depreciated over their
estimated useful lives ranging primarily from two to six years.

Fresh Start Amortization and Depreciation consists of the following:

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
----------------------------- ---------------
1994
(AS COMBINED) 1995 1996 1995 1996
------------- ------- ------- ------- -------
FRESH START AMORTIZATION: (IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Amortization of Reorganization
Value in Excess of Identifi-
able Assets................... $32,126 $55,072 $55,072 $42,862 $22,947
Amortization of Licenses, Pat-
ents and Other................ 6,041 8,926 5,263 2,606 3,672
Amortization of Trademarks..... 1,757 3,191 2,560 2,395 2,309
------- ------- ------- ------- -------
Total Fresh Start Amortiza-
tion Included in Amortiza-
tion of
Intangibles................. 39,924 67,189 62,895 47,863 28,928
------- ------- ------- ------- -------
<CAPTION>
FRESH START DEPRECIATION:
<S> <C> <C> <C> <C> <C>
Included in Cost of Goods
Sold.......................... 1,673 2,790 2,895 1,887 2,192
Included in Selling, General
and Administrative Expenses... 371 620 643 417 487
------- ------- ------- ------- -------
Total Fresh Start Deprecia-
tion........................ 2,044 3,410 3,538 2,304 2,679
------- ------- ------- ------- -------
Total Fresh Start Amortization
and Depreciation.............. $41,968 $70,599 $66,433 $50,167 $31,607
======= ======= ======= ======= =======
</TABLE>
(5) In accordance with SOP 90-7, no interest expense on the Pre-petition
Securities (as defined below) was accrued from June 25, 1992 through June
30, 1993.
(6) "Operating Cash Flow" is defined as operating income (loss) adjusted for
noncash charges for amortization and depreciation of intangible assets and
property, plant and equipment. Other companies may calculate Operating
Cash Flow in a different manner and the Company's presentation of
Operating Cash Flow may not be comparable to similar presentations
reported by other companies. Operating Cash Flow does not take into
consideration substantial costs of doing business, such as interest
expense, and should not be considered in isolation or as a substitute for
other measures of performance, such as operating income or cash flow from
operations determined in accordance with generally accepted accounting
principles. Operating Cash Flow does not represent funds available for
discretionary use by the Company due to funds required for debt service,
capital expenditures to replace fixed assets, and other commitments and
contingencies. Operating Cash Flow Adjusted for the Effects of
Restructuring and Management Changes excludes the effect of a
restructuring provision of $2.4 million and $10.7 million for fiscal 1996
and the nine months ended October 31, 1996, respectively, and certain
other expenses associated with the restructuring and management changes
totaling $4.2 million for the nine months ended October 31, 1996. See
"Management's Discussion and Analysis of Financial Condition and Results
of Operations--Liquidity and Capital Resources."
(7) Includes the effects of SOP 90-7 "fresh start" adjustments recorded at June
30, 1993, net of depreciation and amortization. Pursuant to SOP 90-7, the
net book value of property and equipment was increased by $34 million and
intangible and other assets were increased by $530 million.
(8) Immediately prior to the effective date of the Plan, $527 million principal
amount of Astrum's 12.85% Senior Subordinated Notes due 1997 (the "Pre-
petition Notes") and $698 million principal amount of Astrum's 13.05%
Subordinated Debentures due 1999 (the "Pre-petition Debentures" and,
together with the Pre-petition Notes, the "Pre-petition Securities") were
outstanding. The Pre-petition Securities were classified as long-term debt
as of January 31, 1991. Due to the default that occurred on the Pre-
petition Securities during the year ended January 31, 1992, the
classification was changed to current liabilities since payment had been
demanded. These obligations have been included in long-term obligations for
purposes of this presentation. During the year ended January 31, 1993,
these obligations were reclassified to liabilities subject to compromise in
Chapter 11 proceedings to conform to the reporting requirements of
companies in bankruptcy proceedings. The amount shown at January 31, 1993
includes the Pre-petition Securities plus accrued interest thereon through
June 25, 1992.
(9) Pursuant to SOP 90-7, under the Plan effected in June 1993, $1.5 billion in
long-term debt subject to compromise including accrued interest was
forgiven in exchange for $500 million principal amount of the Company's 11
1/2% Senior Secured Notes (the "Senior Secured Notes"), approximately $342
million in cash and 15 million shares of Common Stock. In July 1995, the
Senior Secured Notes were redeemed with the proceeds from the sale of the
Series A Notes (as defined herein) and borrowings under the Senior Credit
Facility (as defined herein).

10
<PAGE>

RISK FACTORS

Prospective purchasers of the shares of Common Stock offered hereby should
carefully consider all of the information set forth in this Prospectus and, in
particular, should evaluate the following risks in connection with an
investment in the Common Stock offered hereby.

SIGNIFICANT NON-CASH CHARGES OF THE COMPANY; REPORTED LOSSES

As a result of the emergence from bankruptcy of Astrum, the Company's
predecessor, on June 30, 1993, Astrum and all its subsidiaries were required
to adjust their assets and liabilities to reflect their fair values. The
reorganization value in excess of identifiable assets of Samsonite, which was
$165.2 million at the time of Astrum's emergence from bankruptcy, was
amortized through charges to the consolidated statement of operations over a
three year period that ended in June 1996. While these amounts represent non-
cash charges, they have had an adverse effect on reported results of
operations in fiscal years 1994, 1995, 1996 and in the nine months ended
October 31, 1996. The amortization of these charges has had a similar adverse
effect on reported stockholders' equity. See "Selected Historical and Pro
Forma Consolidated Financial Data."

SIGNIFICANT INDEBTEDNESS

At October 31, 1996, the Company had short-term debt obligations totalling
$7.3 million, long-term debt obligations, including current installments, of
$292.6 million and total stockholders' equity of $20.8 million. After giving
pro forma effect to the Offerings and the application of the net proceeds to
the Company therefrom, at October 31, 1996, the Company would have had short-
term debt obligations of $7.3 million, long-term debt obligations, including
current installments, of $182.8 million and total stockholders' equity of
$141.8 million. The Company believes that for the next twelve months its cash
flow from operations, together with its other available sources of liquidity,
will be adequate to make required payments of principal and interest on its
indebtedness and to fund anticipated capital expenditures and working capital
requirements. However, if at any time the Company is unable to generate
sufficient cash flow from operations, it may be required to refinance all or a
portion of its existing indebtedness or to obtain additional financing. There
can be no assurance that any such refinancing would be possible or that any
additional financing could be obtained on terms that are favorable or
acceptable to the Company.

IMPLEMENTATION OF BUSINESS STRATEGY; FORWARD-LOOKING STATEMENTS

The Company's business strategy includes plans to (i) streamline its
management team and organizational structure, (ii) improve its cost structure
and work practices, (iii) develop and introduce to the market a new product
and pricing architecture, (iv) achieve increased sales growth through a
variety of initiatives, including improved marketing, expansion into emerging
foreign markets and broadening of its retail operations, (v) improve return on
equity and (vi) strengthen the balance sheet. The Company's strategic plan
should be considered in light of the risks and expenses associated with
implementing these strategies. Successful implementation of these strategies
will depend on numerous factors, many of which are beyond the Company's
control, including economic, competitive and other conditions and
uncertainties and the ability to retain qualified management personnel. No
assurance can be given that the Company will be successful in implementing its
business strategy.

Certain statements under the captions "Prospectus Summary," "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and elsewhere in this Prospectus constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
performance or achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, the following:
general economic and business conditions; industry capacity; changes in
customer preferences; demographic changes; competition; changes in methods of
distribution and technology; changes in political, social and economic
conditions and local regulations, particularly in Europe and Asia; the loss of
any significant customers; and various other factors beyond the Company's
control.

11
<PAGE>

The forward-looking information referred to above includes, but is not
limited to, estimated annual cost savings resulting from the consolidation and
restructuring programs described herein. In addition to the risks,
uncertainties and other factors referred to above which may cause actual
amounts to differ materially from estimated amounts, such estimates of annual
cost savings are based on various factors and were derived utilizing numerous
important assumptions, including (i) achieving estimated reductions in the
number of total employees within anticipated time frames and at currently
projected severance cost levels, while maintaining work flow in the business
areas affected, (ii) the assimilation of American Tourister and other
production in Samsonite's Denver facility without disruption to distribution
activities and (iii) subleasing vacated facilities within anticipated time
frames at anticipated sublease rent levels. The failure of these assumptions
to be realized may cause the actual annual cost savings to differ materially
from the estimates.

RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS; CURRENCY RISKS

Approximately 50% of the Company's net sales for fiscal 1996 were
attributable to its European sales and other foreign operations and export
sales from the United States. In addition to its European manufacturing and
distribution subsidiaries, the Company has a 100% owned Mexican manufacturing
and distribution company and is a partner in joint ventures which are
currently building factories and distribution facilities in India and China,
as well as a joint venture operating a sales and distribution facility in
Singapore. The Company is also involved in negotiations to enter into a joint
venture to manufacture and distribute luggage in Brazil and other South
American countries. The Company's operations may be affected by economic,
political and governmental conditions in some of the countries where the
Company has manufacturing facilities or where its products are sold. In
addition, factors such as changes in economic or political conditions in any
of the countries in which the Company operates could result in unfavorable
exchange rates, new or additional currency or exchange controls, other
restrictions being imposed on the operations of the Company, or expropriation.
The Company's operations also may be adversely affected by significant
fluctuations in the value of the U.S. dollar or the failure of a partner in an
international joint venture to meet performance expectations. When
appropriate, the Company enters into foreign exchange contracts in order to
reduce its economic exposure on certain foreign operations and/or royalty
agreements through the use of forward delivery commitments. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business."

COMPETITION

The Company competes with many domestic and international companies in its
global markets. Samsonite competes on brand name, consumer advertising,
product innovation, quality, differentiation of product features, customer
service and price. The worldwide luggage market is highly fragmented, with the
vast majority of individual competitors having annual sales that are less than
10% of the Company's sales; nevertheless, the Company has many competitors.
Barriers to entry into the manufacturing of softside luggage are very low and
the Company faces competition from many low cost manufacturers of inexpensive,
softside luggage products. In contrast to the softside luggage market, more
significant capital costs are necessary to enter the manufacturing of hardside
luggage; nonetheless, the Company has several hardside luggage competitors in
its major U.S. and European markets. See "Business--Competition."

RESTRICTIVE COVENANTS

The Company's existing bank credit facility (the "Senior Credit Facility")
contains numerous financial and operating covenants, including restrictions on
the ability of the Company to pay dividends; incur indebtedness; merge,
consolidate or transfer all or substantially all of its assets; make certain
sales of assets; make investments in joint ventures; make capital
expenditures; create, incur or permit the existence of certain liens and
requires the Company to achieve and maintain certain financial ratios. The
indenture pursuant to which the Company's 11 1/8% Series B Senior Subordinated
Notes (the "Series B Notes") were issued contains similar covenants. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." Such financial covenants affect
the operating flexibility of the Company. The failure to comply with the
covenants would result in a default and permit the lenders under the Senior
Credit Facility or the holders of the Series B Notes to accelerate the
maturity of the indebtedness.

12
<PAGE>

CONTROLLING STOCKHOLDERS

Prior to giving effect to the Offerings, certain entities affiliated with
Carl C. Icahn (collectively, "Icahn") and affiliates of Apollo Advisors, L.P.
(collectively, "Apollo") beneficially own approximately 21.54% and 45.78%,
respectively, of the outstanding Common Stock. Upon completion of the
Offerings, Icahn will own 313,800 shares of Common Stock, representing
approximately 1.57% of the outstanding Common Stock (no shares of Common Stock
if the Underwriters' over-allotment options are exercised in full) and, as a
result of the sale of Common Stock in the Offerings by the Company and the
exercise of stock options in connection therewith, Apollo's ownership will be
diluted to approximately 36.70% of the outstanding Common Stock (36.15% if the
over-allotment options granted to the Underwriters are exercised in full). See
"Principal and Selling Stockholders" and "Underwriting." By reason of such
percentage ownership, Apollo may have significant control over the management
and policies of the Company.

The level of ownership of the outstanding Common Stock by the Company's
principal stockholders may have the effect of making more difficult or of
discouraging, absent the support of such stockholders, a proxy contest, a
merger involving the Company, a tender offer, an open market purchase program
or purchases of the Common Stock that could give holders of such stock the
opportunity to realize a premium over the then-prevailing market price for
their shares of the Common Stock.

CONTINGENT LIABILITIES

As discussed in note 14 to the consolidated financial statements included
elsewhere in this Prospectus, the Company has recorded significant contingent
liabilities as a result of the reorganization of Astrum in 1993.

As discussed in note 14 under Contingent Liabilities to Pension Benefit
Guaranty Corporation and in note 19f, the Company has recorded a liability of
$26.6 million, as adjusted in the third quarter of fiscal 1997, for claims
made by the Pension Benefit Guaranty Corporation (the "PBGC") related to
unfunded pension liabilities of other companies which, prior to the
reorganization, were part of a controlled group of companies which included
the Company. As part of its plan of reorganization, Astrum agreed to become
secondarily liable for unfunded obligations of such plans and accrued an
amount representing the maximum amount of unfunded liability should the
pension plans be terminated and the Company be required by the PBGC to make
immediate payment of the liability at the time of emergence from
reorganization. In August 1996, agreements among the primarily liable
companies, the PBGC and the Company became effective, which agreements allow
the Company to assume sponsorship of the pension plans at its election. The
Company intends to exercise such election should the primarily liable
companies cease funding their obligations. If the Company assumed sponsorship
of the plans, the Company would be able to fund the pension liabilities over
an extended period of time. The primarily liable companies continue to fund
the current obligations of the plans, but are in reorganization, and the
Company can provide no assurance that it will not become necessary to assume
sponsorship of such plans and become primarily liable for their funding.

As discussed in note 14 under Contingent Liability with Respect to the Old
Notes and in note 19d, the Company has a contingent liability for interest on
overdue installments of interest liabilities accruing prior to the
reorganization of Astrum. A contingent liability of $16.4 million was recorded
for such claims in 1993 although various parties have challenged the
allowability of the claim on the basis that interest on overdue installments
of interest is not permitted under applicable non-bankruptcy law. In June
1996, the Company settled approximately $4.0 million of such claims for
$200,000. The settled claims were held by Apollo Investment Fund, L.P.
("Apollo Investments") and an affiliate of Apollo Investments. After giving
effect to the Offerings, Apollo Investments and its affiliates will own 36.70%
of the issued and outstanding shares of the Company's Common Stock (36.15% if
the Underwriters' over-allotment options are exercised in full).

On November 14, 1996, the federal bankruptcy court ruled in favor of the
Company and held that the interest on interest claims are not allowable;
however, the decision may be appealed and, in such event, there is no
assurance that the bankruptcy court's ruling will be upheld.

13
<PAGE>

As discussed in note 14 under Obligations to Settlement Trust, the Company
has a contingent liability to a trust (the "Trust") which was established for
the benefit of the holders of certain pre-bankruptcy claims against the
Company. The terms of the Trust require the Company to make up to $37 million
in loans to the Trust to pay resolved claims and to make distributions to
holders of claims against the Trust. The Company has made loans to the Trust
totaling $4.8 million, which have been fully reserved in the Company's
consolidated financial statements. As of January 31, 1996, the Trust had
approximately $56 million in assets and allowed claims of approximately $25
million. Consequently, the Company does not anticipate being required to loan
additional amounts to the Trust, and further believes its $4.8 million loan to
the Trust will be repaid with interest. However, assurance cannot be given
that further loans to the Trust will not be required or that the $4.8 million
loan to the Trust will be repaid.

RISKS ASSOCIATED WITH INTELLECTUAL PROPERTY RIGHTS

The Company's intellectual property rights include trade secrets, know-how,
patents, copyrights and registered and unregistered trademarks, several of
which are licensed to third parties and generate royalties. While these rights
provide a degree of exclusivity, they are not self-executing and they should
be considered in the light of the risks and expenses associated with obtaining
such rights, maintaining them, and enforcing them, as well as those associated
with defining the precise scope of those rights, and avoiding like rights of
others. While the Company takes steps it deems reasonable to protect its
intellectual property rights, to assert them successfully against those who
would infringe upon such rights, and to avoid conflict over the rights of its
competitors, no assurance can be given that the Company will be successful in
doing so. See "Business--Trademarks and Patents."

CERTAIN ANTI-TAKEOVER PROVISIONS

Certain provisions of the Company's Amended and Restated Certificate of
Incorporation, and Restated By-Laws, together and separately, may discourage
potential acquisition proposals, delay or prevent a change in control of the
Company and limit the price that certain investors might be willing to pay in
the future for shares of the Common Stock. These provisions include a
classified board of directors and advance notice procedures for stockholders
to nominate candidates for election as directors of the Company and to submit
proposals for consideration at stockholders' meetings. See "Description of
Capital Stock--Certain Charter and By-Laws Provisions."

SHARES ELIGIBLE FOR FUTURE SALE

No prediction can be made as to the effect, if any, that future sales of
Common Stock, or the availability of Common Stock for future sales, will have
on the market price of the Common Stock prevailing from time to time. Sales in
the public market of substantial amounts of Common Stock (including shares of
Common Stock acquired upon the exercise of options), or the perception that
such sales could occur, could adversely affect prevailing market prices for
the Common Stock. See "Shares Eligible for Future Sale."

DIVIDEND POLICY

The Company does not intend to declare any cash dividends on its Common
Stock in the foreseeable future. See "Dividend Policy."

14
<PAGE>

USE OF PROCEEDS

Assuming an offering price of $37.50 per share, the estimated net proceeds
to the Company from the Offerings will be approximately $105.7 million (or
approximately $116.4 million if the Underwriters' over-allotment options are
exercised in full) after deducting estimated underwriting discounts and
expenses of the Offerings payable by the Company. See "Underwriting." The
Company will not receive any of the proceeds from the sale of shares of Common
Stock by the Selling Stockholders. In addition, the Company will receive
approximately $10.6 million from the exercise of stock options by one of the
Selling Stockholders who is selling shares in the Offerings which will be
issued upon exercise of such options. See "Capitalization." The Company will
use such net proceeds as follows: (i) approximately $69.7 million will be used
to prepay approximately $63.3 million principal amount of the Series B Notes
at a redemption price of 110.125% of such principal amount (which includes an
aggregate redemption premium of approximately $6.4 million ); and (ii)
approximately $46.6 million will be used to reduce borrowings under the Senior
Credit Facility. As of October 31, 1996, borrowings under the Senior Credit
Facility bore interest at a weighted average rate of 7.24% per annum.

PRICE RANGE OF COMMON STOCK

The Common Stock is presently traded on the Nasdaq National Market under the
symbol "SAMC". Prior to the July 14, 1995 merger of Samsonite and Astrum, the
Company's Common Stock was traded on the Nasdaq National Market under the
symbol "ASTI". The table below sets forth the high and low sale prices for the
Common Stock for the period from June 23, 1994, when public trading of the
Common Stock commenced, through January 6, 1997 (as reported on the Nasdaq
National Market). On January 6, 1997, the last reported sale price of the
Common Stock on the Nasdaq National Market was $40.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED JANUARY 31, 1995 HIGH LOW
- ---------------------------------- ---- -------
<S> <C> <C>
Fiscal quarter ended:
July 31, 1994 (for period beginning June 23, 1994)............ $ 23 $ 18
October 31, 1994.............................................. 24 1/2 17
January 31, 1995.............................................. 24 1/4 20
<CAPTION>
FISCAL YEAR ENDED JANUARY 31, 1996
- ----------------------------------
<S> <C> <C>
Fiscal quarter ended:
April 30, 1995................................................ $ 28 5/8 $ 23 1/4
July 31, 1995................................................. 28 3/4 26
October 31, 1995(1)........................................... 28 1/4 9 7/8
January 31, 1996.............................................. 10 3/8 9 1/4
<CAPTION>
FISCAL YEAR ENDED JANUARY 31, 1997
- ----------------------------------
<S> <C> <C>
Fiscal quarter ended:
April 30, 1996................................................ $ 19 1/4 $ 9 5/8
July 31, 1996................................................. 24 1/2 17 3/8
October 31, 1996.............................................. 40 3/4 18
November 1, 1996 through January 6, 1997...................... 40 7/8 33 1/2
</TABLE>
- --------
(1) Prior to September 12, 1995, Culligan Water Technologies, Inc.
("Culligan") was a wholly owned subsidiary of the Company. On September
12, 1995, the Company distributed, as a special dividend, all of
Culligan's then outstanding common stock to the Company's stockholders.
The high and low sale prices for the Common Stock during the period from
August 1, 1995 through September 12, 1995 were $28 1/4 and $26,
respectively. From September 13, 1995 through October 31, 1995, the high
and low sales prices were $17 1/2 and $9 7/8, respectively.

As of December 31, 1996, the number of holders of record of the Common Stock
was 46.

15
<PAGE>

DIVIDEND POLICY

The Company has not declared any cash dividends on the Common Stock and does
not currently anticipate paying cash dividends in the foreseeable future. The
payment of dividends will be a business decision to be made by the Company's
Board of Directors (the "Board of Directors") from time to time based on such
considerations as the Board of Directors deems relevant. In addition,
dividends are payable only out of funds legally available under Delaware law,
subject to any restrictions which may be contained in the Company's debt
instruments. The payment of cash dividends on the Common Stock is currently
restricted by the Senior Credit Facility and the Indenture governing the
Series B Notes.

DILUTION

As of October 31, 1996, the net tangible book value (deficit) of the Company
was $(109.1) million in the aggregate, or $(6.81) per share of outstanding
Common Stock. "Net tangible book value (deficit) per share" represents the
amount of total tangible assets of the Company reduced by the amount of total
liabilities and divided by the number of shares of Common Stock outstanding.
After giving effect to the sale of the shares of Common Stock offered hereby
and the application of the net proceeds therefrom as set forth under "Use of
Proceeds" (assuming a public offering price of $37.50 per share) and the
exercise of stock options by Steven J. Green as described elsewhere herein,
the net pro forma tangible book value of the Company as of October 31, 1996
would have been approximately $11.9 million in the aggregate, or $.60 per
share of Common Stock. This represents an immediate reduction in net tangible
book deficit of $7.41 per share of Common Stock to existing stockholders as a
result of the Offerings and an immediate dilution of $36.90 per share of
Common Stock to new stockholders purchasing shares of Common Stock in the
Offerings. "Dilution per share" represents the difference between the price
per share to be paid by new stockholders for the shares of Common Stock issued
in the Offerings and the net pro forma tangible book deficit per share as of
October 31, 1996. The following table illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed offering price per share............................ $37.50
Net tangible book deficit per share before the Offerings.... $ (6.81)
Deficit reduction per share attributable to the Offer-
ings..................................................... 7.41
-------
Net tangible book value per share as adjusted to reflect the
Offerings.................................................. .60
------
Dilution per share to new stockholders...................... $36.90
======
</TABLE>

16
<PAGE>

CAPITALIZATION

The following table sets forth the cash and cash equivalents, short-term
obligations, and capitalization of the Company as of October 31, 1996 and as
adjusted to reflect the sale by the Company of shares of Common Stock in the
Offerings and the application of the net proceeds therefrom (assuming that the
Underwriters' overallotment options are not exercised). The information set
forth in the table should be read in conjunction with "Selected Historical and
Pro Forma Consolidated Financial Data" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1996
-------------------------
ACTUAL AS ADJUSTED(1)
-------- --------------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents............................ $ 3,145 $ 3,145
======== =========
Short-term debt and current installments of long-term
obligations......................................... $ 26,804 $ 26,804
-------- ---------
Long-term obligations:
11 1/8% Series B Senior Subordinated Notes......... 190,000 126,667
Senior Credit Facility............................. 57,500 10,946
Notes payable to banks, capital leases and other
obligations....................................... 25,667 25,667
-------- ---------
Total long-term obligations...................... 273,167 163,280
-------- ---------
Total obligations.............................. 299,971 190,084
-------- ---------
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares
authorized; no shares issued and outstanding...... -- --
Common stock, $.01 par value; 60,000,000 shares
authorized; 16,021,950 shares issued and
outstanding; 19,986,168 shares as adjusted for the
Offerings(2)(3)................................... 160 200
Additional paid-in capital......................... 264,584 390,615
Accumulated deficit................................ (238,160) (243,273)
Foreign currency translation adjustment............ (4,916) (4,916)
Unearned compensation-restricted stock............. (844) (844)
-------- ---------
Total stockholders' equity....................... $ 20,824 $ 141,782
======== =========
Total capitalization (including short-term
debt, net of cash and cash equivalents)....... $317,650 $ 328,721
======== =========
</TABLE>
- --------
(1) As adjusted to reflect (i) the issuance and sale by the Company of
3,000,000 shares of Common Stock, assuming an offering price of $37.50 per
share, net of underwriting discounts and offering expenses payable by the
Company and (ii) the exercise, in connection with the Offerings, of all
outstanding stock options held by Steven J. Green to purchase 1,853,668
shares of Common Stock and, in each case, the application of the net
proceeds therefrom. See "Use of Proceeds."
(2) In connection with the Offerings, Steven J. Green will exercise
outstanding options to purchase 1,853,668 shares of Common Stock for an
aggregate exercise price of approximately $44.0 million. The exercise
price will be paid by Mr. Green tendering to the Company 889,450 shares of
Common Stock and approximately $10.6 million in cash (assuming an offering
price of $37.50 per share). Accordingly, after giving effect to the
Offerings, the number of outstanding shares of Common Stock will increase
by the sum of 3,000,000 (the number of shares being issued and sold by the
Company in the Offerings) and 964,218 (the net increase in the number of
shares held by Mr. Green after the exercise of the stock options described
above).
(3) Does not include (i) 2,549,142 shares issuable upon exercise of
outstanding stock options at a weighted average exercise price of $24.38
per share, (ii) 116,667 shares issuable under stock award agreements or
(iii) 625,877 additional shares reserved for issuance pursuant to the
Company's 1995 Stock Option and Incentive Award Plan and Directors' Stock
Plan.

17
<PAGE>

SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL DATA

The selected historical consolidated financial data for the Company
presented below are derived from the Company's audited consolidated financial
statements. The Company's consolidated financial statements as of and for the
years ended January 31, 1996 and 1995, the seven months ended January 31,
1994, and the five months ended June 30, 1993, which have been restated for
discontinued operations, have been audited by KPMG Peat Marwick LLP ("KPMG"),
independent accountants. KPMG's report on the Company's consolidated financial
statements as of and for the seven months ended January 31, 1994 contains
language that (i) explains that the financial statements for periods
subsequent to June 30, 1993 are presented on a different cost basis than for
prior periods and, therefore, are not comparable (also included in subsequent
reports); and (ii) highlights changes in methods for accounting for income
taxes and postretirement benefits other than pensions. The selected historical
consolidated financial data as of and for the nine months ended October 31,
1996 and 1995 are unaudited but, in the opinion of management, include all
adjustments (consisting of normal recurring adjustments) necessary for the
fair presentation of the financial data for such periods.

The selected financial information presented below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Company's consolidated financial statements
and notes thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PREDECESSOR COMPANY(1) REORGANIZED COMPANY(1)
------------------------------------ ------------------------------------------------------------------
COMBINED
FIVE SEVEN TWELVE NINE MONTHS
YEAR ENDED MONTHS MONTHS MONTHS YEAR ENDED ENDED
JANUARY 31, ENDED ENDED ENDED JANUARY 31, OCTOBER 31,
------------------------ JUNE 30, JANUARY 31, JANUARY 31, ------------------- ------------------
1992 1993 1993 1994 1994(1) 1995 1996 1995 1996
---------- ---------- -------- ----------- ----------- --------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS
DATA:
Net Sales(2).... $ 421,461 $ 480,630 $192,519 $331,100 $ 523,619 $ 635,452 $675,209 $505,707 $553,124
Cost of Goods
Sold........... 250,894 280,051 113,032 196,777 309,809 373,967 414,691 307,458 335,363
---------- ---------- -------- -------- ---------- --------- -------- -------- --------
Gross Profit.... 170,567 200,579 79,487 134,323 213,810 261,485 260,518 198,249 217,761
Selling, General
and
Administrative
Expenses(3).... 124,787 146,211 66,094 97,480 163,574 197,716 203,701 153,197 174,140
Amortization of
Intangibles(4).. 441 466 206 39,924 40,130 67,189 63,824 47,863 29,622
Provision for
Restructuring
Operations..... -- -- -- -- -- -- 2,369 -- 10,670
---------- ---------- -------- -------- ---------- --------- -------- -------- --------
Operating Income
(Loss)......... 45,339 53,902 13,187 (3,081) 10,106 (3,420) (9,376) (2,811) 3,329
Interest
Income......... 1,309 -- -- 4,342 4,342 2,909 4,709 4,058 1,172
Other Income
(Expense)...... (1,813) (2,421) 360 5,504 5,864 2,729 3,967 3,357 18,453
Interest Expense
and
Amortization of
Premium and
Issue Costs of
Debt(5)........ 214,957 103,871 4,404 24,839 29,243 37,875 39,974 30,851 27,112
Reorganization
Items.......... 8,949 (415) 462,447 -- 462,447 -- -- -- --
Income Tax
Expense........ 1,630 12,991 2,313 6,797 9,110 10,619 9,095 7,495 8,603
Minority
Interest in
Earnings of
Subsidiaries... (2,510) (2,293) (901) (1,148) (2,049) (931) (1,385) (428) (852)
---------- ---------- -------- -------- ---------- --------- -------- -------- --------
Income (Loss)
from Continuing
Operations..... (165,313) (68,089) 468,376 (26,019) 442,357 (47,207) (51,154) (34,170) (13,613)
Income (Loss)
from Operations
Discontinued
and Sold,
Cumulative
Effect of
Change in
Accounting
Principles and
Extraordinary
Items.......... 296,401 112,108 456,448 (25,502) 430,946 (64,372) (10,293) (8,042) --
---------- ---------- -------- -------- ---------- --------- -------- -------- --------
Net Income
(Loss)......... $ 131,088 $ 44,019 $924,824 $(51,521) $ 873,303 $(111,579) $(61,447) $(42,212) $(13,613)
========== ========== ======== ======== ========== ========= ======== ======== ========
Loss per Share
from Continuing
Operations..... $ (1.68) $ (3.05) $ (3.24) $ (2.16) $ (.85)
======== ========= ======== ======== ========
Net Loss per
Share.......... $ (3.33) $ (7.22) $ (3.89) $ (2.68) $ (.85)
======== ========= ======== ======== ========
BALANCE SHEET
DATA (AS OF END
OF PERIOD):
Property, Plant
and Equipment,
Net............ $ 106,918 $ 101,581 $ 131,894(6) $ 137,686 $140,912 $148,800 $138,170
Total Assets.... 757,667 825,970 1,111,735(6) 866,000 621,443 678,695 598,504
Long-Term
Obligations
(including
current
installments).. 1,330,160(7) 1,579,447(7) 573,197(8) 417,175 310,959 305,414 292,642
Stockholders'
Equity
(Deficit)...... (960,097) (923,833) 253,693(8) 148,472 25,116 49,177 20,824
</TABLE>

(see footnotes beginning on page 20)

18
<PAGE>

IMPACT OF FAIR VALUE ADJUSTMENTS ATTRIBUTABLE TO THE REORGANIZATION OF ASTRUM,
RESTRUCTURINGS AND CERTAIN OTHER EXPENSES:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
------------------------------ ------------------
1994
(AS COMBINED) 1995 1996 1995 1996
------------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Fresh Start Amortization
and Depreciation.......... $41,968 $70,599 $66,433 $ 50,167 $31,607
Provision for Restructuring
Operations................ -- -- 2,369 -- 10,670
Certain Other Expenses
Associated with the
Restructuring and
Management Changes(3)..... -- -- -- -- 4,200
Tax Benefit................ (4,035) (6,366) (5,629) (2,995) (9,648)
------- ------- ------- -------- --------
After-Tax Impact on Net
Loss...................... $37,933 $64,233 $63,173 $ 47,172 $36,829
======= ======= ======= ======== ========
Impact on Net Loss Per
Share..................... $ 4.15 $ 4.00 $ 2.99 $ 2.31
======= ======= ======== ========
</TABLE>

(see footnotes on following page)

19
<PAGE>

- --------
(1) In June 1993, Astrum completed a financial restructuring pursuant to the
Plan. Effective June 30, 1993 and pursuant to SOP 90-7, the Company was
required to adjust its assets and liabilities to their fair ("fresh
start") values and create a new entity for financial reporting purposes.
The information for the "Predecessor Company" reflects activity occurring
through June 30, 1993, prior to the effectiveness of the Plan, and the
information for the "Reorganized Company" reflects activity occurring
after such date. As a result of the effects of SOP 90-7 on amortization of
intangibles, depreciation, interest expense, and reorganization items, the
periods before and after June 30, 1993 are not comparable.
(2) The Company acquired American Tourister in August 1993. Net sales for the
combined year ended January 31, 1994 include net sales of $47.7 million of
American Tourister for five months. Net sales for the fiscal years ended
January 31, 1996 and 1995 include net sales of $115.0 million and $117.8
million, respectively, of American Tourister for 12 months.
(3) Selling, general and administrative expenses include $4.2 million of
expenses during the nine months ended October 31, 1996 for consulting fees
to establish the restructuring plan ($0.8 million), for the cessation of
the former chief executive officer's employment and the change in
management ($2.9 million), and for expenses in excess of the original
provision in fiscal 1996 for the consolidation of American Tourister
manufacturing facilities ($0.5 million).
(4) As discussed in note (1) above, the Company adjusted its assets and
liabilities to their fresh start values effective June 30, 1993. Since
June 30, 1993, the Company's statements of operations include amortization
and depreciation related to these fresh start adjustments. The most
significant fresh start adjustment relates to recording Reorganization
Value in Excess of Identifiable Assets, which was amortized over a three-
year period ending in June 1996. In addition, fresh start amortization
includes amortization of fresh start adjustments to reflect the fair value
of trademarks, licenses, patents and other intangibles, which are being
amortized over periods from one to forty years. Fresh start amortization
and depreciation also includes depreciation of fresh start adjustments to
reflect the fair value of property and equipment, depreciated over their
estimated useful lives ranging primarily from two to six years.

Fresh Start Amortization and Depreciation consists of the following:

(5) In accordance with SOP 90-7, no interest expense on the Pre-petition
Securities was accrued from June 25, 1992 through June 30, 1993.
(6) Includes the effects of SOP 90-7 "fresh start" adjustments recorded at
June 30, 1993, net of depreciation and amortization. Pursuant to SOP 90-7,
the net book value of property and equipment was increased by $34 million
and intangible and other assets were increased by $530 million.

20
<PAGE>

(7) Immediately prior to the effective date of the Plan, $527 million
principal amount of Astrum's Pre-petition Notes and $698 million principal
amount of Astrum's Pre-petition Debentures were outstanding. The Pre-
petition Securities were classified as long-term debt as of January 31,
1991. Due to the default that occurred on the Pre-petition Securities
during the year ended January 31, 1992, the classification was changed to
current liabilities since payment had been demanded. These obligations
have been included in long-term obligations for purposes of this
presentation. During the year ended January 31, 1993, these obligations
were reclassified to liabilities subject to compromise in Chapter 11
proceedings to conform to the reporting requirements of companies in
bankruptcy proceedings. The amount shown at January 31, 1993 includes the
Pre-petition Securities plus accrued interest thereon through June 25,
1992.
(8) Pursuant to SOP 90-7, under the Plan effected in June 1993, $1.5 billion
in long-term debt subject to compromise including accrued interest was
forgiven in exchange for $500 million principal amount of the Senior
Secured Notes, approximately $342 million in cash and 15 million shares of
Common Stock. In July 1995, the Senior Secured Notes were redeemed with
the proceeds from the sale of the Series A Notes and borrowings under the
Senior Credit Facility.

- --------

Had the Offerings occurred and the net proceeds of the Offerings been
applied to reduce the indebtedness of the Company as of February 1, 1995, the
pro forma interest expense, income tax expense, net loss, loss per share from
continuing operations, and net loss per share for the year ended January 31,
1996 would have been approximately $29.1 million, $13.6 million, $55.0
million, $2.26 and $2.78, respectively. For the nine months ended October 31,
1996, the pro forma interest expense, income tax expense, net loss and net
loss per share would have been approximately $19.0 million, $11.9 million,
$8.8 million and $0.44, respectively. These pro forma adjustments to the
historical results of operations for the reduction of interest expense and the
related tax effects of the reduced interest expense as if the net proceeds of
the Offerings had been applied to reduce indebtedness as of February 1, 1995,
are not necessarily indicative of the results of operations that would have
been reported if such transactions had occurred on the date referred to, nor
are they necessarily indicative of the results of operations to be expected in
the future.

21
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the
selected financial information and consolidated financial statements and
accompanying notes included elsewhere in this Prospectus. The Company's fiscal
year ends on January 31 and references to a fiscal year denote the calendar
year in which the fiscal year ended; for example, "fiscal 1996" refers to the
twelve months ended January 31, 1996. The following discussion and analysis of
results of operations compares (i) the Company's results of operations for the
nine months ended October 31, 1996 with the Company's results of operations
for the nine months ended October 31, 1995, (ii) the Company's results of
operations for fiscal 1996 with the Company's results of operations for fiscal
1995, and (iii) the Company's results of operations for fiscal 1995 with the
combined results of operations for the five months ended June 30, 1993 for the
Predecessor Company and the Reorganized Company's results of operations for
the seven months ended January 31, 1994. Due to a revaluation of assets and
liabilities and the adoption of a new basis of accounting from "fresh start"
reporting, the results of operations for periods subsequent to June 30, 1993
are not comparable to the results of operations for prior periods. The
Company's results of operations for fiscal 1995 include a full year of
operations for American Tourister, and the Company's results of operations for
fiscal 1994 include five months of the results of operations of American
Tourister following its acquisition by the Company in August 1993.

GENERAL

Prior to July 14, 1995, the Company, then known as Astrum International
Corp., was a holding company whose principal subsidiaries were Samsonite
Corporation, Culligan, and McGregor Corporation ("McGregor"). On July 14,
1995, Astrum merged with Samsonite Corporation, and changed its name to
Samsonite Corporation.

During fiscal 1995, the Company's Board of Directors determined to separate
Culligan's water purification and treatment business from the Company's other
business and to sell or otherwise discontinue McGregor's apparel manufacturing
business. Accordingly, the consolidated financial statements of the Company
reflect these operations as discontinued in accordance with Accounting
Principles Board Opinion No. 30. To effect the separation of Culligan from the
Company, the Company distributed all of the outstanding common stock of
Culligan to its stockholders on September 12, 1995 on a share-for-share basis.

On July 14, 1995, the Company issued $190.0 million principal amount of 11
1/8% Series A Senior Subordinated Notes (the "Series A Notes") pursuant to a
private placement and restructured its bank credit arrangements. Net proceeds
from the Series A Notes of approximately $183 million, and a $112 million
repayment of intercompany debt from Culligan, together with new bank
borrowings, were used to redeem all outstanding 11 1/2% Senior Secured Notes
on August 14, 1995. The aggregate redemption price of the 11 1/2% Senior
Secured Notes was $375 million, which included a contractual redemption
premium of $18 million. Other borrowings that were refinanced included amounts
outstanding under the Company's European and domestic credit facilities.

The Company consummated an exchange offer of the Series B Notes for all
outstanding Series A Notes on November 20, 1995, resulting in the issuance of
$190.0 million aggregate principal amount of Series B Notes in exchange for a
like amount of Series A Notes. The terms of the Series B Notes and the Series
A Notes were identical in all material respects, except for certain transfer
restrictions and registration rights specific to the Series A Notes.

The Company's continuing operations consist of a single business segment,
the manufacture and sale of luggage and luggage products. The Company's sales
are directed to three principal markets: the United States, Europe and
International (representing the balance of the world).

22
<PAGE>

EFFECTS OF REORGANIZATION ON RESULTS OF OPERATIONS

Included in the Company's statements of operations are amortization and
depreciation expenses related to adjustments of assets and liabilities to fair
value in connection with the adoption of SOP 90-7. As a result of the
bankruptcy reorganization of the Company's predecessor in 1993, the Company
was required to adjust its assets and liabilities to their fair ("fresh
start") values and create a new entity for financial reporting purposes. The
most significant fresh start adjustment related to recording Reorganization
Value in Excess of Identifiable Assets, which was being amortized over a
three-year period which ended in June of 1996. In addition, the Company
recorded fresh start adjustments to reflect trade names, licenses, patents and
other intangibles at their fair values, which are being amortized over periods
ranging from one to forty years. Property and equipment adjusted to fair
values in connection with the adoption of SOP 90-7 are being depreciated over
their respective estimated useful lives, primarily ranging from two to six
years.

The effects of the amortization and depreciation of the fresh start
adjustments ("Fresh Start Amortization and Depreciation") on operating results
are summarized as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
------------------------------ ------------------
1994
(AS COMBINED) 1995 1996 1995 1996
------------- ------- ------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Operating income (loss).... $10,106 $(3,420) $(9,376) $ (2,811) $ 3,329
Fresh Start Amortization
and Depreciation.......... 41,968 70,599 66,433 50,167 31,607
------- ------- ------- -------- --------
Operating income before
Fresh Start Amortization
and Depreciation.......... $52,074 $67,179 $57,057 $ 47,356 $ 34,936
======= ======= ======= ======== ========
</TABLE>
"Fresh start" amortization and depreciation consisted of the following:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
----------------------------- -----------------
1994
(AS COMBINED) 1995 1996 1995 1996
------------- ------- ------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Fresh Start Amortization:
Amortization of
Reorganization Value in
Excess of Identifiable
Assets...................... $32,126 $55,072 $55,072 $ 42,862 $ 22,947
Amortization of Licenses,
Patents, and Other.......... 6,041 8,926 5,263 2,606 3,672
Amortization of Trademarks... 1,757 3,191 2,560 2,395 2,309
------- ------- ------- -------- --------
Total Fresh Start Amortiza-
tion...................... 39,924 67,189 62,895 47,863 28,928
------- ------- ------- -------- --------
Fresh Start Depreciation:
Fresh Start Depreciation in
Cost of Goods Sold.......... 1,673 2,790 2,895 1,887 2,192
Fresh Start Depreciation in
Selling, General and Admin-
istrative Expenses.......... 371 620 643 417 487
------- ------- ------- -------- --------
Total Fresh Start Deprecia-
tion...................... 2,044 3,410 3,538 2,304 2,679
------- ------- ------- -------- --------
Fresh Start Amortization and
Depreciation.................. $41,968 $70,599 $66,433 $ 50,167 $ 31,607
======= ======= ======= ======== ========
</TABLE>

23
<PAGE>

The impact of the "Fresh Start" amortization and depreciation on Net Loss
and Net Loss Per Share is summarized as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
------------------------------ ------------------
1994
(AS COMBINED) 1995 1996 1995 1996
------------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
Fresh Start Amortization
and Depreciation......... $41,968 $70,599 $66,433 $ 50,167 $31,607
Tax Benefit............... (4,035) (6,366) (4,658) (2,995) (3,551)
------- ------- ------- -------- --------
After-Tax Impact on Net
Loss..................... $37,933 $64,233 $61,775 $ 47,172 $28,056
======= ======= ======= ======== ========
Impact on Net Loss Per
Share.................... $ 4.15 $ 3.91 $ 2.99 $ 1.71
======= ======= ======== ========
</TABLE>

RESULTS OF OPERATIONS

NINE MONTHS ENDED OCTOBER 31, 1996 COMPARED TO NINE MONTHS ENDED OCTOBER 31,
1995

General. The Company analyzes its sales and operations by the following
categories: (1) "European operations" which consist of its European
manufacturing and distribution operations whose functional currency is the
Belgian franc, (2) "U.S. operations" which includes sales within the U.S. from
the Samsonite and American Tourister manufacturing and distribution operations
and (3) "International operations" which include exports from the U.S.,
manufacturing and distribution operations in countries with operations which
are smaller in size compared to the U.S. and Europe (primarily Canada and
Mexico), and global licensing operations.

Results of European operations were translated from Belgian francs to U.S.
dollars for the nine months ended October 31, 1996 and 1995 at average rates
of approximately 30.73 and 29.39 Belgian francs to the U.S. dollar,
respectively. This represents a decrease in the value of the Belgian franc of
4.6%, which results in decreases in reported sales, cost of sales and other
expenses in fiscal 1997 compared to last year. The most significant effects
from the difference in exchange rates from last year to the current year are
noted in the following analysis and referred to as an "exchange rate
difference."

Net Sales. Total net sales increased to $553.1 million for the first nine
months of fiscal 1997 from $505.7 million for the first nine months of fiscal
1996, an increase of $47.4 million or 9.4%. Adjusted for the European exchange
rate difference, sales increased from last year by 11.3%.

Sales from European operations increased from $200.9 million last year to
$207.3 million in the current year, an increase of $6.4 million. The exchange
rate difference resulted in a $9.5 million decrease in reported sales versus
last year. The remainder, an increase of $15.9 million, represents an increase
in sales expressed in Belgian francs of 7.9% from last year. Despite a
generally weak European economy, sales have increased due to increased market
share, increased sales of diversified products, consumer acceptance of new
product lines, and a strong summer selling season.

Sales from U.S. operations increased from $245.8 million last year to $279.0
million in the current year, an increase of $33.2 million or 13.5%. The
Company believes this increase is due to continued broad consumer preference
and demand for Samsonite brand products, particularly lines of upright,
lightweight softside luggage which were redesigned in fiscal 1996.
Additionally, the Company began sales in the third quarter of fiscal 1997 of
its new EZ CART(TM) product. Sales from the Company's retail stores increased
by $10.1 million or 25.9%, from $39.0 million last year to $49.1 million in
the current year. Same store sales increased by 9.3% from last year.

Sales from the International operations increased from $59.0 million last
year to $66.8 million in the current year, an increase of $7.8 million or
13.2%. Of the $7.8 million increase in revenues from last year, $3.9 million
is due to revenue from the sale of McGregor apparel tradenames in certain
Pacific Rim countries. The remainder is due primarily to increased sales from
the Mexico City manufacturing and distribution company.

24
<PAGE>

Gross Profit. Overall gross profit for the first nine months of 1997
increased from last year by $19.5 million. Gross margin increased 0.2
percentage point, from 39.2% last year to 39.4% in the current year.

Gross margins from European operations increased by 1.3 percentage points,
from 37.5% last year to 38.8% in the current year. The improvement is due
primarily to price increases in selected product lines, declining materials
costs, and improving productivity variances compared to those of last year.

Gross margins from U.S. operations decreased by 1.0 percentage point from
39.8% last year to 38.8% in the current year. The margin decline is primarily
due to lower margins on certain fast selling new product lines, an increase in
sales of obsolete goods at low margins, promotional sales of selected
products, negative productivity variances caused by the startup of production
of new hardside products, and a $0.7 million customer credit given on certain
American Tourister sales which were defective. Through the second quarter of
fiscal 1997, margins were 2.1 percentage points lower than in the prior year.
The improvement as of the end of the third quarter was primarily due to
discontinuation of a promotional sale of selected products, a price increase
which was effective October 1, 1996, and product cost improvements.

Gross margin percentages from International operations, excluding the effect
of the sale of licenses, decreased from last year for the same reasons given
for the decline in U.S. margins.

Selling, General and Administrative Expenses ("SG&A"). Consolidated SG&A
increased by $20.9 million from the first nine months of fiscal 1996 to the
first nine months of fiscal 1997. As a percent of sales, SG&A was 31.5% in the
current year and 30.3% last year. Expenses totaling approximately $4.2 million
were incurred during the first nine months of fiscal 1997 in connection with
establishing the restructuring plan (described elsewhere herein), the
cessation of the former chief executive officer's employment, the hiring of
new and additional members of the executive management team, and for expenses
incurred in excess of the original provision for the consolidation of American
Tourister manufacturing facilities. Without such expenses, SG&A would have
been 30.7% of sales during the first nine months of fiscal 1997.

SG&A for European operations increased by $3.9 million. The exchange rate
difference caused SG&A to decrease by $2.6 million. The remainder, an increase
of $6.5 million, resulted from an increase in SG&A expressed in Belgian francs
of 12.1%. The increase over last year is due primarily to variable selling and
distribution expenses, increases in advertising expenses, increases in
salaries and employee benefits due to staff additions and increases in group
insurance premiums and the impact of credits in the prior year of a reversal
of termination benefits accruals, an increase in the provision for doubtful
accounts due to financial difficulties of certain customers, and increases in
new product development costs.

SG&A for U.S. operations increased by $15.8 million in the first nine months
of fiscal 1997 over the same period last year primarily because of increased
advertising expenses ($4.0 million), increased retail selling expenses
associated with the increase in sales from last year ($6.4 million), expenses
incurred in connection with the cessation of the former chief executive
officer's employment ($2.6 million), the retention of new and additional
executive management ($2.0 million), increased provision for doubtful accounts
($0.6 million), and consulting fees associated with the restructuring plan
($0.8 million), and a net decrease in various other expenses of $0.6 million.

SG&A for the International operations increased by $1.2 million primarily
due to the expenses incurred in new foreign joint venture operations in
Singapore, China and India.

Amortization of Intangible Assets. The Company recorded significant
intangible assets as a result of its reorganization in 1993. See the
comparative analysis of amortization of intangibles included elsewhere herein.

Reorganization value in excess of identifiable assets was fully amortized as
of June 30, 1996, which accounts for the decrease in amortization of
intangible assets from $47.9 million last year to $29.6 million in the current
year.

25
<PAGE>

Provision for Restructuring Operations. The Company recorded a restructuring
provision of $10.7 million in the third quarter of fiscal 1997 as a result of
a restructuring program, approved by the Board of Directors and announced in
October 1996, to further consolidate functions and operations in North
America, Europe and the Far East, and to reduce or eliminate certain other
operations. The restructuring is expected to be completed by October 1997. The
restructuring plan includes further consolidation of hardside luggage
production to Samsonite's largest U.S. facility located in Denver, Colorado
from other locations in the Americas, as well as planned consolidation of many
administrative and control functions, again primarily to Denver. The Company
intends to eliminate at least 450 positions worldwide, including approximately
150 manufacturing positions and approximately 300 managerial, office and
clerical positions. Annual estimated pretax cost savings from the
restructuring program are expected to be approximately $12.7 million. The
restructuring provision consists primarily of costs associated with
involuntary employee terminations and includes a cash expense of $9.7 million
and a non-cash expense of $1.0 million, both on a pretax basis. The lenders
under the Company's Senior Credit Facility have agreed not to consider the
restructuring provision in the computation of lending rates or financial
covenants.

Operating Income (loss). Operating results improved from a loss last year of
$2.8 million to income this year of $3.3 million, an increase of $6.1 million.
This increase is a result of higher revenues which increased gross profit by
$19.5 million from last year and the decrease in amortization of intangibles
of $18.2 million, both of which were partially offset by increases in SG&A of
$20.9 million and the provision for restructuring of $10.7 million.

Interest Income. Interest income decreased from $4.1 million last year to
$1.2 million this year. Last year interest income included $2.9 million
realized from a note receivable collected in connection with the sale of an
investment in a television station. Recurring interest income results from
temporary investments of cash on hand and is consistent with those of last
year.

Interest Expense and Amortization of Debt Issue Costs. Interest expense
decreased from $30.9 million last year to $27.1 million this year due to lower
levels of outstanding indebtedness in fiscal 1997 and lower average interest
rates.

Other, Net. See notes 15 and 19 to the consolidated financial statements
included elsewhere in this Prospectus for a comparative analysis of other
income (expense), net. The Company has entered into certain forward exchange
contracts to hedge its exposures to changes in exchange rates. Other income
for the nine months ended October 31, 1996 included income from foreign
currency transactions of $2.5 million, $0.7 million of which was unrealized at
October 31, 1996. The realization of such income is subject to changes in
exchange rates during the period prior to the settlement of the forward
exchange contracts. Outstanding forward exchange contracts have various
settlement dates through January 1998. In the first nine months of last year,
such foreign exchange transactions resulted in a loss of $2.7 million.

Other income includes $3.8 million from the favorable settlement for
$200,000 of a claim against the Company by a related party. The Company had
previously accrued $4.0 million for such claim. This claim is part of the
Contingent Liability with Respect to the Old Notes described in note 14 to the
consolidated financial statements included elsewhere in this Prospectus and
relates to the claim for interest on overdue installments of interest accruing
prior to the commencement of the bankruptcy of the Company's predecessor in
1993. The contingent liability was recorded as part of the reorganization. The
settled claims were held by Apollo Investments and an affiliate of Apollo
Investments. After giving effect to the Offerings, Apollo Investments and its
affiliates will own 36.70% of the issued and outstanding shares of the
Company's Common Stock (36.15% if the Underwriters' over-allotment options are
exercised in full). See "Underwriting."

Other income in the current year includes $11.1 million from the adjustment
of a previously recorded liability. See note 19 to the consolidated financial
statements included elsewhere in this Prospectus for a discussion of this
item.

Income Taxes. Income taxes increased from $7.5 million last year to $8.6
million in the current year. The increase in tax expense is due to amounts of
pretax earnings from European and other foreign operations in the

26
<PAGE>

current year versus last year, less nondeductible amortization of intangible
assets in the current year, and higher other income in the current year. The
relationship between income tax expense or benefit differs from that expected
by applying the U.S. statutory tax rate to pretax losses primarily because of
(i) the nondeductibility for tax purposes of amortization of reorganization
value in excess of identifiable assets, (ii) foreign income tax expense
provided on foreign earnings, and (iii) state income taxes.

Extraordinary Loss. The extraordinary loss of $8.0 million last year
resulted from a loss on the early retirement of debt.

Net Loss. The net loss decreased from $42.2 million last year to $13.6
million this year, a decrease of $28.6 million. The decrease in the net loss
is caused by the total of the increases in operating and other income and the
decreases in interest income and extraordinary loss, less the increase in
income tax expense.

FISCAL 1996 COMPARED TO FISCAL 1995

General. Results of European operations were translated from Belgian francs
to U.S. dollars in 1996 and 1995 at yearly average rates of approximately
29.38 and 33.17 francs to the U.S. dollar, respectively. This represents an
increase in the value of the Belgian franc of 11.4% in 1996, which increase
results in significant increases in reported sales, cost of sales and other
expenses in 1996 compared to 1995. The most significant effects from the
difference in exchange rates from year to year are noted in the following
analysis and referred to as an "exchange rate difference."

Net Sales. Total net sales increased to $675.2 million in fiscal 1996 from
$635.5 million in fiscal 1995, an increase of $39.7 million or 6.2%.

Sales from European operations increased from $231.0 million in 1995 to
$271.6 million in 1996, an increase of $40.6 million. Of this increase, $31.0
million results from the exchange rate difference. The remainder of the
increase in European sales is attributable to an improved retail sales
environment and the introduction of new products, including the Epsilon
hardside product line. Expressed in terms of its functional currency, European
sales increased by 4.2% in 1996 when compared to 1995.

Sales from U.S. operations declined from $341.1 million in 1995 to $329.6
million in 1996, a decrease of $11.5 million, or 3.4%. The decrease was due to
a weak retail sales environment, increased foreign competition in the low-
priced upright suitcase market, and delays during the first six months of
fiscal 1996 in the introduction of new products. The decline in sales versus
those of the prior year occurred primarily during the first half of fiscal
1996 when sales were $15.7 million less than sales for the same period in
fiscal 1995.

Sales from the International operations increased from $63.4 million in 1995
to $74.0 million in 1996, an increase of $10.6 million or 16.7%. The increase
is attributable primarily to revenues from the Company's Mexican operations of
$11.7 million. The Company acquired the interest of its joint venture partner
in the venture's Mexican operations in exchange for the Company's interest in
the venture's other companies in fiscal 1996 and began consolidating its
results of operations with those of the Company. The results of the Company's
Mexican operations were reported on the equity method of accounting in prior
years.

Gross Profit. Overall gross profit for fiscal 1996 declined from fiscal 1995
by $1.0 million. Gross margin decreased from 41.1% in fiscal 1995 to 38.6% in
fiscal 1996.

Margin percentages from European operations decreased by 0.7% due to
increased sales in 1996 compared to 1995 of products with lower profit
margins, obsolescence write-offs for discontinued product lines, raw materials
price increases, and unfavorable variances associated with the startup of
production for the Epsilon line.

Gross margin percentages from U.S. operations declined 3.3%. A primary cause
of the decrease was higher raw materials costs compared to those of the prior
year, particularly for plastics raw materials and paper product

27
<PAGE>

components. Because of strong competition from lower priced imports, the cost
increases were not offset by product price increases and, in some instances,
were accompanied by sales price decreases. Management estimates higher raw
materials costs resulted in a margin decrease of approximately 1.2%. Other
factors causing the decline in margins and their estimated effect include
increased obsolescence charges (0.8%), increased sales of obsolete goods at
less than normal margins (0.4%), and unfavorable productivity and other
variances (0.9%).

Gross margin percentages from International operations declined by 5.6%
compared to those of the prior year primarily for the same reasons margins
declined for U.S. operations.

Selling, General and Administrative Expenses. Consolidated SG&A increased by
$6.0 million from fiscal 1995 to fiscal 1996.

SG&A for European operations increased by $8.1 million due entirely to the
exchange rate difference from 1995 to 1996. Expressed in terms of its
functional currency, fiscal 1996 Europe division SG&A was unchanged.

SG&A for U.S. operations decreased by $7.4 million from fiscal 1995 to
fiscal 1996. Selling expenses decreased from 1995 to 1996 as a result of a
decrease in advertising expenses of $6.4 million. The decrease in advertising
expenses was offset somewhat by increases in American Tourister retail
division selling expenses and other expenses of $3.9 million.

Other administrative expenses from U.S. operations declined $4.9 million
from the prior year. Reduction in office supplies and equipment, bad debt
expense and performance bonuses contributed to this decrease in expenses. The
Company has been successful in reducing administrative expenses from the
previous year in part due to the merger of Astrum and its subsidiary,
Samsonite Corporation, which resulted in cost savings for part of fiscal 1996
due to the elimination of certain duplicative functions. The Company also
began a program to contain and reduce expenses related to resolution of issues
pertaining to the reorganization and related expenses of attorneys and
consultants and other administrative expenses.

SG&A for the International operations increased by $5.3 million from fiscal
1995 to fiscal 1996. The consolidation of the Mexican operations, which was
accounted for on the equity method in prior years, accounted for $4.9 million
of the increase. The remaining increase resulted primarily from increased
legal fees, advertising and other expenses related to the expansion of the
Company's export business.

Amortization of Intangibles. The Company has recorded significant intangible
assets as a result of the reorganization in 1993. See notes 1b, 1i, 6 and 9 to
the Company's consolidated financial statements included elsewhere herein for
a discussion of the recording and amortization of intangible assets.
Amortization of intangibles decreased from $67.2 million in fiscal 1995 to
$63.8 million in fiscal 1996 as a result of certain license and patent
intangibles becoming fully amortized during the year.

The reorganization value in excess of identifiable assets recorded upon the
reorganization has a remaining recorded amount of $22.9 million at January 31,
1996, which was fully amortized by June 30, 1996.

Provision for Restructuring Operations. The $2.4 million provision for
restructuring resulted from management's decision to restructure the
manufacturing and various administrative functions of its American Tourister
division. Because of available production capacity in its hardside
manufacturing facility in Denver, the American Tourister hardside luggage
manufacturing operations in Jacksonville, Florida, were relocated to Denver in
August 1996. Warehouse and other non-manufacturing functions remained in
Jacksonville. American Tourister maintains a division headquarters in Warren,
Rhode Island, but certain aspects of finance, management information systems,
and human resources functions were consolidated in Denver. The annual cost
savings resulting from the restructuring is estimated to be $3.3 million. The
components of the restructuring charge were (1) $1.0 million for abandonment
of assets and costs to prepare the manufacturing facility to be subleased, (2)
$1.0 million for employee termination costs, and (3) $0.4 million for other
identified restructuring expenses.

28
<PAGE>

Operating Loss. Operating loss increased from $3.4 million in fiscal 1995 to
$9.4 million in fiscal 1996 primarily as a result of the $2.4 million
restructuring charge for American Tourister operations and the decrease in
gross margins discussed above.

Interest Income. Interest income increased from $2.9 million in fiscal 1995
to $4.7 million in 1996, an increase of $1.8 million, primarily as a result of
interest income realized from a note receivable collected in connection with
the sale of an investment in a television station.

Interest Expense and Amortization of Premium and Debt Issue Costs. Interest
expense and amortization of premium and debt issue costs increased by $2.1
million from fiscal 1995 to fiscal 1996. European operations interest expense
increased by $1.1 million, $0.8 million of which was due to the exchange rate
difference. Net additional interest expense of $1.3 million was incurred as a
result of refinancing the Senior Secured Notes. The proceeds of the newly
issued Series A Notes were held in escrow for a period of one month prior to
the retirement of the Senior Secured Notes. During this one month period,
interest accrued on both the Senior Secured Notes and the newly issued Series
A Notes.

Other, Net. See Note 15 to the consolidated financial statements included
elsewhere in this Prospectus for a comparative analysis of other income
(expense).

Income Tax Expense. Although the Company incurred a loss in 1996 and 1995
for financial reporting purposes, income tax expense is accrued primarily
because of (i) the nondeductibility for tax purposes of amortization of
reorganization value in excess of identifiable assets, (ii) foreign income tax
expense provided on foreign earnings and (iii) state income taxes.

Loss from Discontinued Operations. The loss from discontinued operations in
fiscal 1996 includes an adjustment to reduce previously accrued losses on
disposal of $2.6 million, net of income taxes of $1.1 million, and a provision
for federal income taxes on the distribution of Culligan stock to certain
foreign stockholders of $3.8 million.

Extraordinary Item. The extraordinary loss in 1996 resulted from the payment
of an $18.0 million redemption premium upon the early retirement of the Senior
Secured Notes. The extraordinary loss is presented in the consolidated
financial statements net of the unamortized premium on such notes of $4.4
million and the associated income tax benefit of $5.6 million.

Net Loss. The net loss decreased from $111.6 million in fiscal 1995 to $61.5
million in fiscal 1996, a decrease of $50.1 million. The decrease in the net
loss is caused by a reduction in losses from discontinued operations of $62.1
million and the effects of other items discussed above. See Note 2 to the
consolidated financial statements included elsewhere in this Prospectus for a
discussion of the loss from discontinued operations for fiscal 1995.

FISCAL 1995 COMPARED TO THE COMBINED RESULTS FOR THE YEAR ENDED JANUARY 31,
1994 ("FISCAL 1994")

General. The combined results for fiscal 1994 refer to the results of
operations for the Predecessor Company for the five months ended June 30, 1993
combined with the Reorganized Company's results of operations for the seven
months ended January 31, 1994.

Net Sales. Net sales increased to $635.5 million in fiscal 1995 from $523.6
million in fiscal 1994, representing an increase of $111.8 million, or 21.4%.
The results of American Tourister (which was acquired mid-fiscal 1994)
accounted for $70.1 million of the increase. Excluding American Tourister, net
product sales within the United States increased $15.4 million, or 7.5%, to
$221.1 million. The increase in sales was primarily a result of continued
strong sales from the new Silhouette V line of luggage products (which was
introduced in mid-fiscal 1994) and the success of the Company's Lark product
line. European sales increased $26.3 million, or 12.7%, during the year.
Favorable currency exchange rates provided $9.3 million of the increase, with
the

29
<PAGE>

remaining $17.0 million attributable to increased sales from the Company's
high-end System IV product line, increased sales of country-specific branded
products to certain discount retailers, and successful non-luggage product
offerings.

Gross Profit. Gross profit increased to $261.5 million in fiscal 1995 from
$213.8 million in fiscal 1994, representing an increase of $47.7 million or
22.3%. Gross profit margins were 41.1% in fiscal 1995 as compared to 40.8% in
fiscal 1994. A full year of results of American Tourister accounted for $31.7
million of the increase. Excluding American Tourister, gross profit margins
were 41.1% in 1995 as compared to 41.3% in 1994.

Selling, General and Administrative Expenses. SG&A (before holding company
expenses) as a percentage of sales increased to 30.2% in fiscal 1995 from
29.7% in fiscal 1994. The increase was primarily a result of the relatively
higher SG&A (as a percentage of sales) at American Tourister. American
Tourister's SG&A as a percentage of sales averaged 36.4% during fiscal 1995
and is higher due in part to the costs associated with operating its retail
stores. Holding company expenses decreased to $5.5 million in fiscal 1995 from
$8.3 million in fiscal 1994. Holding company expenses for fiscal 1994 included
a charge for compensation expense associated with Astrum's bankruptcy
reorganization.

Amortization of Intangibles. Amortization of intangibles increased to $67.2
million in fiscal 1995 from $40.1 million in fiscal 1994. The increase was
attributable to the recording of a full year of amortization of reorganization
intangibles in fiscal 1995 compared to seven months in fiscal 1994.

Operating Income (Loss). Operating income decreased from $10.1 million in
fiscal 1994 to an operating loss of $3.4 million in fiscal 1995. The decline
of $13.5 million is primarily due to an increase in amortization of intangible
assets of $27.1 million which was partially offset by the increase in other
operating income discussed above.

Other Income. In both fiscal 1995 and fiscal 1994, other income included
royalties received under a royalty agreement in excess of the originally
estimated receipts, which were carried as an account receivable. The royalties
were payable in connection with the sale of the Company's cosmetic and
fragrance business in 1989. In fiscal 1995, the last year in which royalties
were due, royalties declined as a result of a decline in sales of the cosmetic
and fragrance businesses that had been sold.

Interest Expense. Interest expense increased to $37.9 million in fiscal 1995
from $29.2 million in fiscal 1994, an increase of $8.7 million. Fiscal 1994
interest expense included seven months of interest compared to twelve months
for fiscal 1995.

Income Tax Expense. In addition to the effects of the change in pretax
income, the effective tax rate was affected by the nondeductibility of the
amortization of reorganization value in excess of identifiable assets.

Net Income (Loss). Net income declined from $873.3 million for fiscal 1994
to a net loss of $111.6 million for fiscal 1995. The decline in net income
from 1994 to 1995 is due to the effects of reorganization items reported
during fiscal 1994, losses recorded during fiscal 1995 relating to
discontinued operations, and the effects on net income of other operating
items discussed above. For a more complete discussion of reorganization items
and discontinued operations, see notes 2 and 9 to the Company's consolidated
financial statements included elsewhere in this Prospectus.

LIQUIDITY AND CAPITAL RESOURCES

One measure of liquidity is commonly referred to as Operating Cash Flow.
Operating Cash Flow is defined as operating income (loss) adjusted for noncash
operating expenses, including amortization and depreciation. The Company
believes that Operating Cash Flow provides useful information regarding the
Company's ability to incur and service debt, but that it should not be
considered a substitute for operating income or cash flow from operations
determined in accordance with generally accepted accounting principles. Other
companies may

30
<PAGE>

calculate Operating Cash Flow in a different manner and the Company's
presentation of Operating Cash Flow may not be comparable to similar
presentations reported by other companies. Operating Cash Flow does not take
into consideration substantial costs of doing business, such as interest
expense, and should not be considered in isolation or as a substitute for
other measures of performance, such as operating income or cash flow from
operations determined in accordance with generally accepted accounting
principles. Operating Cash Flow does not represent funds available for
discretionary use by the Company due to funds required for debt service,
capital expenditures to replace fixed assets, and other commitments and
contingencies. Operating Cash Flow for the nine months ended October 31, 1995
and 1996 and for the fiscal years ended January 31, 1994 (as combined), 1995
and 1996 was computed as follows:

Operating Cash Flow has been reduced for the effects of the provision for
restructuring operations and certain other expenses associated with the
restructuring and management team changes as follows:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JANUARY 31, OCTOBER 31,
----------------------------- -----------------
1994
(AS COMBINED) 1995 1996 1995 1996
------------- ------- ------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Operating Cash Flow............ $65,130 $82,066 $74,725 $ 59,901 $ 49,566
Effect of provision for
restructuring operations...... -- -- 2,369 -- 10,670
Certain other expenses
associated
with the restructuring and
management
changes....................... -- -- -- -- 4,200
------- ------- ------- -------- --------
Operating Cash Flow adjusted
for the effects of
restructuring and management
changes....................... $65,130 $82,066 $77,094 $59,901 $ 64,436
======= ======= ======= ======== ========
</TABLE>

Operating Cash Flow decreased by $10.3 million for the nine months ended
October 31, 1996 compared to that of the same period in the previous year.
Operating Cash Flow in the current nine-month period was negatively affected
by the effects of the restructuring provision of $10.7 million and expenses
totaling approximately $4.2 million incurred during the first nine months of
fiscal 1997 for consulting services in connection with establishing the
restructuring plan (described elsewhere herein), the cessation of the former
chief executive officer's employment, the hiring of new and additional members
of the executive management team, and for expenses incurred in excess of the
original provision for the consolidation of American Tourister manufacturing
facilities. Operating Cash Flow decreased from $82.1 million in 1995 to $74.7
million in 1996, a decrease of $7.4 million, primarily as a result of the
decrease in operating income and the American Tourister restructuring
provision. The Company believes that the current level of Operating Cash Flow
is adequate to support its existing credit facilities and service the
Company's Series B Notes and other long-term obligations.

31
<PAGE>

Another measure of liquidity is net cash provided by operating activities,
as reflected in the consolidated statements of cash flows included elsewhere
herein. Net cash provided by continuing operating activities before
reorganization items of $10.7 million and $16.4 million for the nine months
ended October 31, 1996 and 1995, respectively, and $9.8 million in 1996, $36.4
million in 1995 and $57.3 million in 1994 (as combined), reflects net cash
from continuing operations of the Company available for the Company's
liquidity needs, after taking into consideration the substantial costs of
doing business not reflected in Operating Cash Flow and before reorganization
items.

The decrease of $5.7 million in cash flows provided by operations, from
$16.4 million for the nine months ended October 31, 1995 to $10.7 million for
the nine months ended October 31, 1996, resulted from the net impact of an
increase of $22.1 million in cash flow used to support working capital and
other operating assets, and an increase of $16.4 million in cash flows
provided by operations, adjusted for non-operating and non-cash charges. Cash
flows from continuing operations before reorganization items decreased from
$36.4 million in 1995 to $9.8 million in fiscal 1996, a decrease of $26.6
million. Of this amount, $21.4 million resulted from cash flow applied to
increase working capital and other operating assets (exclusive of net assets
from discontinued operations), while cash flows from net income, adjusted for
non-operating and non-cash charges and discontinued operations, decreased by
$5.2 million in 1996 from fiscal 1995.

Cash flow provided by (used in) investing activities decreased from $79.5
million for the nine months ended October 31, 1995 to $(3.6) million for the
nine months ended October 31, 1996. Cash flow for the prior nine-month period
included the receipt of $112.0 million from the discontinued Culligan water
treatment business. Cash flow provided from discontinued operations in the
current nine-month period resulted from the collection of accounts receivable
related to the discontinued apparel business and the collection of a
receivable under a tax sharing agreement from the Culligan water treatment
business which was spun off in fiscal 1996. Cash flows provided by "Other"
investing activities includes $5.0 million received in the current nine-month
period from the substitution of a letter of credit for cash previously held
under a contractual escrow arrangement. Capital expenditures were $19.7
million in the current nine-month period and $15.9 million in the previous
nine-month period. Cash flow from investing activities decreased by $37.1
million, from $151.7 million in fiscal 1995 to $114.6 million in fiscal 1996,
primarily because of a reduction of $70.7 million due to the expiration in
fiscal 1995 of a royalty agreement. Cash flow from discontinued operations
increased by $35.2 million in fiscal 1996 compared to 1995 as a result of a
$112 million payment from Culligan and approximately $10.5 million of cash
received from the discontinued apparel business. Cash flow from the sale of
assets also increased by $13.7 million in fiscal 1996 compared to 1995 as a
result of the sale of an investment in a television station in 1996. Capital
expenditures were $24 million in fiscal 1996 compared to $18.5 million and
$13.1 million in fiscal 1995 and 1994, respectively. Capital expenditures are
made to improve facilities and equipment in order to manufacture new product
lines, increase manufacturing efficiencies, and enhance the Company's
competitiveness and profitability on a worldwide basis.

Cash flows used in financing activities decreased from $137.3 million for
the nine months ended October 31, 1995 to $18.0 million for the nine months
ended October 31, 1996, a decrease of $119.3 million. In the current nine-
month period, cash flow from financing activities includes $10.0 million from
the collection of a note receivable from the Company's former chief executive
officer which was taken in exchange for 425,532 shares of the Company's Common
Stock in fiscal 1996. Cash flow used in financing activities for the nine
months ended October 31, 1995 included $105.5 million of debt repayment
financed largely by the cash received from the discontinued water treatment
business. Cash flows used in financing activities increased from $154.0
million in fiscal 1995 to $157.2 million in fiscal 1996, an increase of $3.2
million. Net short and long-term borrowings were reduced by $124.4 million in
fiscal 1996 compared to a reduction in fiscal 1995 of $154.0 million. In
fiscal 1996, the Company used $18.0 million for a redemption premium payable
upon the retirement of the Senior Secured Notes and $13.5 million for issuance
costs of the Series A Notes and the Series B Notes and the Senior Credit
Facility. The issuance costs are included in other long-term assets in the
consolidated financial statements at January 31, 1996.

During fiscal 1996 the Company negotiated the Senior Credit Facility with a
bank, issued $190.0 million of Series A Notes (subsequently exchanged for
Series B Notes), and used the proceeds therefrom along with cash received from
discontinued operations and the sale of non-luggage related assets to
substantially reduce long-

32
<PAGE>

term obligations. At January 31, 1996, long-term obligations (including
current installments) were $311.0 million, representing a decrease of $106.2
million from January 31, 1995. The Senior Credit Facility provides for a $50
million term loan and a $175 million revolving credit facility due July 14,
2000. See Note 8b to the consolidated financial statements included elsewhere
herein for a discussion of the Senior Credit Facility. At January 31, 1996,
the Company had $107.6 million of available borrowings under the Senior Credit
Facility.

At October 31, 1996, the Company had working capital of $122.6 million
compared to $99.5 million at January 31, 1996, an increase of $23.1 million.
Current assets increased by $20.8 million due to an increase of $40.5 million
in receivables and inventories and a net decrease in cash and other current
assets of $19.7 million. The increase in receivables and inventories is
primarily due to the cyclical nature of the Company's business. Trade
receivables and inventories at October 31, 1996 were $7.4 million and $19.0
million, respectively, higher than at October 31, 1995 because of higher sales
levels in the current year and inventory build up for the EZ CART(TM) and
other products in anticipation of the Christmas selling season. Accounts
payable were $5.9 million higher at October 31, 1996 compared to October 31,
1995 due to higher cost of sales and expense levels and improved payables
management in the current year.

The Company's cash flows from operations together with amounts available
under its credit facilities were sufficient to fund its operations, scheduled
payments of principal and interest on indebtedness, and capital expenditures.
At October 31, 1996, the Company had $112.1 million available under its Senior
Credit Facility. In connection with the Offerings, the Company expects that it
will repay approximately $46.6 million of indebtedness under the Senior Credit
Facility and will also prepay approximately $63.3 million of the Series B Notes.
Management of the Company believes that cash flow from operations and available
borrowings under its credit facilities and new credit facilities in emerging
markets will be adequate to fund operating requirements and expansion plans
during the next 12 months. In addition, management currently believes the
Company will be able to meet long-term cash flow obligations from cash provided
by operations and other existing resources.

The Company's principal foreign operations are located in Western Europe,
the economies of which are not considered to be highly inflationary. When
appropriate, the Company will enter into foreign exchange contracts in order
to hedge its exposure on certain foreign operations through the use of forward
delivery commitments. During the past several years, the Company's most
effective hedge against foreign currency changes has been the foreign currency
denominated debt balances maintained in respect to its foreign operations.
Geographic concentrations of credit risk with respect to trade receivables are
not significant as a result of the diverse geographic areas covered by the
Company's operations.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In March 1995, the Financial Accounting Standards Board ("FASB") issued
Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of, which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amount. Statement 121 also addresses
the accounting for long-lived assets that are expected to be disposed of. The
Company adopted Statement 121 in the first quarter of fiscal 1997, which had
no material effect on the consolidated financial statements.

In October 1995, the FASB issued Statement No. 123, Accounting for Stock-
Based Compensation, which provides an alternative to APB Opinion No. 25,
Accounting for Stock Issued to Employees, in accounting for stock-based
compensation issued to employees. Statement 123 allows for a fair value based
method of accounting for employee stock options and similar equity
instruments. However, for companies that continue to account for stock-based
compensation arrangements under Opinion No. 25, Statement 123 requires
disclosure of the pro forma effect on net income and earnings per share of its
fair value based accounting for those arrangements. These disclosure
requirements are effective for fiscal years beginning after December 15, 1995,
or upon initial adoption of the Statement, if earlier. The Company did not
adopt the recognition and measurement provisions of the Statement; however,
the required disclosure will be provided for its fiscal year ending
January 31, 1997.

33
<PAGE>

BUSINESS

GENERAL

Samsonite is one of the world's largest manufacturers and distributors of
luggage. The Company markets its products primarily under the SAMSONITE(R),
AMERICAN TOURISTER(R) and LARK(R) brand names. The Samsonite brand enjoys
worldwide recognition and is the leading brand of luggage products in the
United States and Europe. American Tourister is the second most recognized
brand of luggage in the United States. Following the Company's acquisition of
American Tourister in 1993, the Company introduced the American Tourister
brand in Europe. The Lark brand is well-recognized in the United States and
competes in the premium segment of the luggage market. Samsonite and American
Tourister luggage products have been manufactured and sold continuously since
the 1930's.

With sales of $722.6 million for the twelve months ended October 31, 1996,
the Company is a major factor in the worldwide luggage market. Competition in
the luggage market is highly fragmented with the vast majority of individual
competitors having less than 10% of the Company's annual luggage sales.
Samsonite offers the broadest range of products in the luggage industry,
including hardside suitcases, softside suitcases, garment bags, casual bags,
hardside and softside business cases and other travel bags. Many of today's
most successful luggage products and features--such as suitcases with a built-
in luggage cart; full-featured, structured garment bags; ultra-light, softside
suitcases; and innovative wheel systems--were introduced and popularized by
Samsonite. Hardside suitcases accounted for approximately 32% of the Company's
sales in fiscal 1996. As a result of recent improvements in Samsonite's
proprietary molding technology and design, the Company soon will be able to
offer to consumers who prefer the greater protection and security of hardside
luggage, hardside suitcases that are lighter in weight and comparable to
softside products in terms of interior organization features. Softside
products (excluding business cases), which accounted for approximately 53% of
the Company's sales in fiscal 1996, appeal to consumers because of their light
weight, flexibility and convenience for a variety of purposes.

The Company's products are sourced through a global network consisting of 13
Company-operated manufacturing facilities and various third-party suppliers
throughout the world. By operating its own facilities to produce hardside
luggage and more complex softside products, the Company is better able to
control manufacturing quality and to achieve shorter product introduction lead
times and lower delivery costs. In addition, the Company takes advantage of
its global sourcing capabilities by opportunistically buying basic products
from various countries when their product costs or exchange rates are
particularly favorable. The Company produces substantially all of its hardside
products in Company-operated plants in the United States, Belgium and France.
Approximately 54% of the Company's softside products are sourced from
qualified vendors located principally in the Far East, Eastern Europe and the
Dominican Republic, with the balance produced by the Company in the United
States, Belgium, Italy, Mexico, Spain and Hungary.

The Company's marketing and distribution strategy focuses on the broad
middle segment of the luggage market. In the United States, the Samsonite
brand has historically been positioned as high quality, innovative luggage,
targeted at frequent business travelers; the American Tourister brand has been
positioned as quality luggage at an affordable price; and the Lark brand has
been positioned as premium luggage targeted at first and business class
travelers. In Europe, the Samsonite brand enjoys more of a premium image than
in the United States, and is targeted at first class and frequent business
travelers.

The Company's products are sold throughout the world in more than 100
countries through approximately 23,000 retail outlets, including department
and specialty stores, catalog showrooms, mass merchant retailers and warehouse
clubs. As of November 30, 1996, the Company also distributed products through
147 Company-owned retail stores in the United States and two Company-owned
premium luggage stores in Europe. In addition, Samsonite licenses its
trademark for use on non-luggage products such as travel accessories, personal
leather goods, handbags and furniture. These products are made and sold
primarily by independent licensees which pay royalties to Samsonite.

34
<PAGE>

BUSINESS STRATEGY AND NEW GROWTH INITIATIVES

Management believes that the Company's leading position in the global
luggage industry is due to its widely recognized brand names, broad range of
innovative luggage products and global manufacturing and distribution network.
In addition, the substantial cash flow generated by the Company is available
for investments in product development, advertising and marketing.

. DEVELOP A NEW, INTEGRATED GLOBAL PRODUCT AND PRICING ARCHITECTURE. The
Company is conducting a study to identify those products, features and
styles which have proven most successful throughout the world. Based on
the results of this study, the Company is developing a new global product
and pricing architecture which will provide a more complete assortment of
consumer-preferred products, features and styles at a broad range of
price points for each key channel of distribution in each major market
throughout the world. The new product and pricing architecture largely
represents an adaptation of Samsonite's successful European product line-
up which includes more upscale product offerings. This strategy is
designed not only to improve the Company's margin structure, but also to
strengthen the premium brand image of the Samsonite brand, particularly
in North America. As part of the new product architecture, Samsonite will
offer a wider array of style-coordinated hardside and softside luggage
products. Further, by using a simpler, more uniform global product
architecture, the Company will be able to shorten product cycle times,
which will permit innovations to be introduced more rapidly throughout
the Company's worldwide markets. For example, during fiscal 1997,
Samsonite introduced the EZ CART(TM) suitcase, a new concept in softside
luggage, in the United States simultaneously across the Samsonite,
American Tourister and Lark brands. This new product is an upright,
softside suitcase with a balanced, four-wheel system designed to be more
maneuverable with less effort, and to take the weight off the traveler's
arm and transfer it to the floor. The EZ CART(TM) product is expected to
be introduced in Europe and the Far East within the next six to nine
months.

35
<PAGE>

. Broaden Channels of Distribution. The Company plans to increase its
presence in channels of distribution in which it believes it is
under-represented by using targeted marketing and sales efforts
tailored to each channel of distribution. In addition, the Company
intends to exploit its manufacturing and sourcing leverage by
aggressively pursuing opportunities to sell American Tourister and
retailer-labeled products in mass retailers and other high volume
potential channels throughout the world.

. Continue Worldwide Expansion. The Company plans to continue expansion
worldwide in countries where growing economies and reduced political
and trade barriers provide opportunities for long-term growth.
Samsonite currently is expanding its presence in emerging foreign
markets, including markets in China, India, South America and the
Pacific Rim. In the first quarter of fiscal 1997, a joint venture
with a local partner to distribute Samsonite products in Singapore
and Malaysia began operating successfully. In addition, through joint
ventures with local partners in India and China, the Company plans to
manufacture and distribute Samsonite products in these countries
beginning in fiscal 1998. The Company is also currently negotiating
with its Argentine distributor to form a joint venture to manufacture
and distribute Samsonite products in Brazil and other major South
American markets beginning in fiscal 1998.

. Accelerate Company-owned Retail Store Sales Growth. The Company
intends to increase its retail outlets as well as broaden and
strengthen its retail operations. In October 1996, Samsonite began
marketing all three of the Company's key brands throughout its
Company-owned luggage stores in the United States which had
previously sold only American Tourister luggage. In addition,
Samsonite is adopting best operational and merchandising practices
designed to reduce costs and increase sell-through. Sales have
continued to accelerate in the Company's retail operations, thereby
increasing positive operating cash flow.

. IMPROVE RETURN ON EQUITY AND CONTINUE TO STRENGTHEN THE BALANCE
SHEET. The Company has implemented a comprehensive strategy to reduce
leverage and improve return on equity, including the possible divestiture of
various non-core assets. To better manage working capital, the Company is
negotiating new extended payment terms with most of its major vendors,
accelerating the collection of accounts receivable, and reducing inventory
levels through SKU reductions, as well as better requirements forecasting.
The net proceeds from the sale of shares being offered by the Company
hereby, as well as the anticipated asset sales and reductions in working
capital requirements will be used to reduce debt and, in turn, debt service
expense. See "Use of Proceeds." The Company expects these actions, combined
with the other strategic initiatives, to result in an improved return on
equity in fiscal 1998.

THE LUGGAGE MARKET

The worldwide luggage market covers a wide range of products, values and
price points. At the highest end of the market are luxury products (such as
Louis Vuitton and Gucci) that have prestige identities and high prices.
Beneath the luxury segment is the broad middle band of the luggage market in
which products are differentiated by features, brand name and price. Within
this band, unit sales volumes are largest at the middle and lower prices and
product differentiation decreases with price level. At the low end of the
luggage market, unbranded products with few, if any, differentiating features
are sold in significant volumes and at low margins, competing primarily on the
basis of price.

36
<PAGE>

In the United States, luggage is sold to consumers through (i) traditional
retail distribution channels, including department and specialty luggage
stores; (ii) catalog showrooms; and (iii) discount retail distribution
channels, including mass merchants, warehouse clubs and factory outlet stores.
As of November 30, 1996, Samsonite operated 147 Company-owned retail stores in
the United States. These stores, which previously focused on selling American
Tourister brand products, recently have started selling all three of
Samsonite's primary brands. Samsonite's sales in the United States increased
13.5% for the nine months ended October 31, 1996, compared to those of the
nine months ended October 31, 1995.

In Europe, luggage is sold to consumers primarily through traditional
distribution channels. In the European discount channels, the Company is
distributing several product lines, including its American Tourister brand.
Samsonite's sales (expressed in local currency) in Europe have increased 7.9%
for the nine months ended October 31, 1996, over the comparable periods in the
prior year.

PRODUCTS

The Company offers the broadest range of products in the luggage industry,
including hardside suitcases, softside suitcases, garment bags, casual bags,
hardside and softside business cases and other travel bags. Hardside suitcases
and business cases typically consist of a two-piece rigid plastic shell held
together by a hinge. The plastic shells for hardside cases are made by
injection molding or vacuum forming, some of which use Samsonite's proprietary
technology and designs. Softside suitcases and structured garment bags are
constructed of a flexible fabric stretched over a rigid frame. Garment bags
are designed to hold hanging garments, such as suits and dresses, and can be
opened while hanging up. Casual bags include duffle bags and other bags that
do not have a rigid frame. Business and attache cases are constructed of both
softside or hardside materials. The following table sets forth the percentage
of the Company's fiscal 1996 revenues by product type:

<TABLE>
<S> <C>
Hardside suitcases.................................................... 32%
Softside suitcases.................................................... 32
Garment bags (softside)............................................... 11
Casual bags (softside)................................................ 10
Business cases (hardside and softside) ............................... 8
Other products (primarily non-luggage) ............................... 7
---
100%
===
</TABLE>

The Company sells a full range of luggage products under each of its
Samsonite, American Tourister and Lark brand names. Although the positioning
of the Company's brands and its target consumers vary somewhat from market to
market, the Company generally markets its brands to four consumer segments:
premium, business, leisure and discount. Product lines within each brand are
designed to appeal to targeted consumer groups. The following table sets
forth, for each of the Company's principal luggage brands, its historical
market position and targeted consumer in the United States and Western Europe.

BRAND NAME MARKET POSITION TARGET CONSUMER
- ------------------- -------------------------------- -----------------------

Samsonite Top quality luggage with Business/frequent
consumer-preferred features traveler (also premium
(also positioned as premium traveler in Western
luggage with attractive Europe)
styling in Western Europe)

American Tourister High quality luggage offering Active
contemporary and casual traveler/"youthful"
designs for active or younger lifestyle
lifestyles and extra features

Lark Premium luggage for upscale First and business
consumers with luxurious class traveler
styling and best features

Other brands Branded luggage for price Discount luggage
conscious consumers consumer

37
<PAGE>

The Company has recently introduced category management in order to better
focus on the various segments of consumer needs. This organizational structure
is intended to facilitate management of the Company's business around two
product categories--hardside and softside luggage. In the Americas, these
categories are supported by a separate sales and distribution function.
Category-based management will help to better identify and implement
operational, marketing and cost improvements across all Samsonite's brands
simultaneously.

As a result of its development and implementation of a new product and
pricing architecture, Samsonite has begun introducing globally new hardside
and softside products in order to provide a more complete assortment of
product offerings at a broad range of price points. In addition, the Company's
new product architecture will offer style coordinated pieces of hardside and
softside luggage and casual bags so that the consumer can select from both
types of luggage with matching or complementary styling. The new architecture
will focus on the Company's primary brands, Samsonite, American Tourister and
Lark, while reducing emphasis on many of the secondary names previously in use
(such as Samsonite Silhouette, American Tourister Paradigm and Samsonite
Ultralite). Thus, consumers will have a broader selection of improved luggage
products, will be able to coordinate hardside and softside pieces of luggage
to meet their travel needs, and will select their Samsonite, American
Tourister or Lark product from a portfolio offering a wider spectrum of
prices, features and styling levels.

Hardside Luggage. The Company manufactures virtually all its requirements
for hardside luggage in its own factories. Hardside luggage is sold under the
Samsonite brand globally; in the United States, it is also sold under the
American Tourister brand. Hardside luggage products provide greater protection
and security than softside while offering similar features to assist interior
organization and packing and enhance mobility and portability. These features
reflect the results of extensive market research and consumer testing to
determine the approaches to best meet consumer needs. Both in Europe and in
the United States, hardside products are offered in several lines, each
including a variety of sizes and styles of hardside luggage pieces with
differing features.

In Europe, premium suitcases may sell at retail for up to US$500 per
suitcase. Some of the popular Samsonite-branded hardside lines in Europe
include the Samsonite System 4 Deluxe(R) and System 4(R) lines, both priced at
the higher end of the market, the Samsonite Epsilon(R) lines priced at the
upper-middle of the luggage market, and Samsonite Oyster(R) products priced in
the lower end of the middle of the market. In the United States, the
Samsonite-branded hardside products include the Silhouette(R) series at the
upper-middle of the market and the lower-priced Epsilon(R) products. In the
Americas, Samsonite plans to reintroduce the Oyster(R) products at the lower
end of its market, to reposition Epsilon(R) products to the middle of the
pricing structure and to introduce a higher end line positioned similar to its
European System 4 Deluxe(R) products. As a result, Samsonite's product and
pricing architecture in the Americas will be similar to its successful
European architecture.

Globally, Samsonite distributes and sells hardside suitcases which include
features to facilitate transport. These include the patented Piggyback(R)
product which incorporates a luggage cart, an extendable handle and a strap
allowing additional bags to be attached and transported. As a result of
proprietary improvements in molding technology and design, Samsonite is
introducing new hardside luggage which incorporates lighter weight and
improved interior organization features. The Company also plans to develop a
hardside suitcase incorporating the four-wheel upright design features from
the Company's new EZ CART(TM) softside suitcase.

Softside Luggage. The softside luggage category includes suitcases, garment
bags (both structured and unstructured), softside business cases, casual bags,
and duffels. The Company sources more than half of its requirements for
softside luggage and other bags from numerous independent suppliers located
worldwide, and produces the balance of its requirements in its own facilities
located in several countries. As with the hardside products, the Company has
introduced a number of innovative features in its softside products in
response to consumer needs for better interior organization, ease of use,
mobility and portability. The softside products are sold under all of the
Company's major brands, Samsonite, American Tourister, Lark and some secondary
brands. Globally, the softside products are grouped into product lines with a
variety of matching or complementary suitcases, garment bags and other bags.

The softside luggage products include many consumer-preferred features. The
Samsonite Ultravalet(R) garment bag provides many separate pockets to
facilitate organization of clothing and a reverse folding feature

38
<PAGE>

to reduce wrinkling of clothing on hangers. The Ultravalet(R) garment bag has
been introduced with an extendable handle and wheels to provide an Ultravalet
"Garment Bag with Wheels" incorporating its own transport system. American
Tourister's Paradigm(R) line features a pullman suitcase with a patented "Easy
Turn(R)" center mount wheel system making the suitcase less likely to overturn
while in motion. The Paradigm suitcase also features attractive styling,
sophisticated internal design, and generous capacity to facilitate
organization and packing of contents. In 1996, American Tourister introduced
its Cadence(R) product with the patented Tourister Carry System(R) allowing
the upright suitcase to be the foundation for conveying on wheels other pieces
of luggage in a secure and stable manner. Samsonite has introduced an
Ultralite(R) line of softside products, providing the features desired by
consumers in a lighter weight design.

The Lark brand in the United States, positioned for the premium market,
includes a full line of softside suitcases, garment bags, and casual bags with
top quality materials, some of the best features found in the Company's other
product lines, as well as some additional features. The Lark products
incorporate brass-plated hardware, leather trim and handles, and luxurious
fully-lined interiors for an elegant appearance.

During fiscal 1997, Samsonite introduced the EZ CART(TM) suitcase, a new
concept in softside luggage, in the United States simultaneously under the
Samsonite, American Tourister and Lark brands. The new product is an upright,
softside suitcase with a balanced, four-wheel system designed to be more
maneuverable with less effort, and to take the weight off the traveler's arm
and transfer it to the floor. The EZ CART(TM) product has a shelving feature
to allow the suitcase to be packed and used upright, and includes a "suiter"
for transporting suits or dresses on hangers, a retractable handle design so
the suitcase can be maneuvered by pushing or pulling and a means to attach
other bags for transporting.

Other Luggage Brands. Samsonite utilizes its global manufacturing and
product sourcing leverage to compete in the high-volume, discount channels of
retail distribution by marketing luggage products under a number of secondary
brands and retailer-labels. These hardside and softside luggage products are
generally lower-priced than the Company's Samsonite, American Tourister, and
Lark products, and usually provide fewer features. Samsonite's secondary
brands include Magnum and Royal Traveler in Europe, Tauro in Spain, and Azzura
and Bogey in Italy. Samsonite also plans to expand the uses of the American
Tourister brand in the mass merchant and discount channels.

Licensed Products. The Company licenses its brand names to third parties
primarily for the sale of non-luggage products. In addition to the licensed
Samsonite and American Tourister brand products, such third parties generally
distribute other, non-Samsonite products. Currently, licensed products
distributed by the Company or by third party licensees include furniture
products, travel accessories, photo and audio storage gear, personal leather
goods, ladies handbags, tool organizers, umbrellas, binoculars, pet carriers
and juvenile products. Revenue from royalties for licensing the use of
Company-owned brand names (including apparel brands) totaled approximately
$17.1 million in fiscal 1996.

New Product Design and Development. The Company devotes significant
resources to new product design and development. During fiscal 1996, the
Company spent approximately $7 million on new product design and development
and market research. Most of the Company's products have either been
introduced or substantially redesigned since 1990. The Company uses market
research to identify consumers' luggage needs and then develops product
features that are intended to address these needs. The Company has introduced
and popularized many of today's most successful luggage products, such as
suitcases with built-in luggage carts; ultra-lightweight, softside suitcases;
full-featured, structured garment bags; and innovative wheel systems.
Recently, the Company introduced the EZ CART(TM) suitcase, which has a four-
wheel system designed to be more maneuverable with less effort. The Company
believes the continual development and introduction of products with
innovative features contribute to brand awareness and product differentiation.

DISTRIBUTION

The Company's products are sold in more than 100 countries throughout the
world through approximately 23,000 retail outlets, including department and
specialty stores, catalog showrooms, mass merchant retailers, warehouse clubs,
147 Company-owned stores in the United States and two Company-owned stores in
Europe.

39
<PAGE>

The Company distributes its products through all major distribution channels
in the United States and primarily through traditional distribution channels
in Europe.

North America. The Company sells its Samsonite brand products in North
America primarily through department stores and luggage specialty stores, and
through catalog showrooms and national retailers such as JCPenney, Sears and
Montgomery Ward. The acquisition of American Tourister in 1993 increased the
Company's presence in the discount channels, such as mass merchants, warehouse
clubs and factory outlets, which are becoming increasingly important in the
distribution of luggage. As a result of the strength of its brand names and
its targeted marketing strategy, the Company is able to distribute one or more
full lines of luggage under each of its principal brand names across different
channels of distribution without selling the same product line in more than
one channel. In addition, the Company sells luggage products (known as
"exclusive label" products) designed exclusively for each of a number of
department store and specialty retailing customers and bearing special labels
coupled with the Samsonite brand name.

The following table sets forth the percentage of the Company's United States
revenues by distribution channel for fiscal 1996:

<TABLE>
<S> <C>
Department/specialty stores............................................. 48%
Company-owned stores.................................................... 19
Catalog showrooms....................................................... 11
Mass merchants.......................................................... 11
Exclusive label......................................................... 9
Warehouse clubs......................................................... 2
---
100%
===
</TABLE>

In September 1996, as part of its category-based management structure,
Samsonite formed a separate sales and distribution organization to improve the
focus of all sales and distribution efforts in the United States and Canada.
The new organization includes all sales, product warehousing and distribution,
sales planning and forecasting functions, as well as Samsonite's retail stores
and Samsonite's Legacy division (which markets luggage products to discount
channels). As a result, all relations with customers are focused within one
organization.

The Company has a direct sales force of approximately 100 persons that
serves approximately 10,000 stores in the United States. In coordination with
its key customers, the Company develops exclusive label product lines,
coordinates promotional strategies and establishes merchandise resupply
objectives. The Company employs electronic order gathering and fulfillment
systems that enhance the Company's level of customer service. Combined with
automatic electronic order entry, these systems can increase sales by
minimizing stockouts at the retail level, help the retailer reduce inventory
holding and purchasing costs, and increase inventory turnover. Over 60% of
Samsonite luggage sales in the United States are derived from orders received
through this electronic system.

As of November 30, 1996, the Company operated 147 retail stores in the
United States, making it one of the largest luggage retailers. Operating its
own retail outlets allows the Company to test-market new luggage and to more
efficiently reduce excess inventory positions. Additionally, the Company plans
to use its retail stores to test-market travel accessories and non-luggage
products that it may produce and/or distribute as part of its licensing
efforts.

Europe. The Company distributes its Samsonite brand products in Europe
through specialty luggage stores and department stores. Samsonite brand
products are generally not distributed through the discount retailers in order
to preserve the premium image of the Samsonite brand in Europe. The Company's
American Tourister brand has been introduced in Europe to help balance the
Company's retail distribution in each of the primary retail channels and is
being used to establish a single pan-European brand name in the discount
channel.

The Company services over 11,000 stores in Europe through a direct sales
force of approximately 120 persons that transmits orders by computer to a
central distribution facility in Belgium. The Company delivers its

40
<PAGE>

products to its European retailing customers through a proprietary pan-
European distribution network developed at the Company's European
headquarters. Orders received electronically from the Company's sales force
are processed centrally in Belgium using specialized software created by the
Company which deals in the national currency of each of the Company's
customers, making it capable of billing customers in their local currency. Its
integration with a centralized shipping facility, electronic order entry and
preparation of all paperwork necessary for multiple cross-border deliveries
permits delivery of products within five days after an order is placed. To
complement its direct sales force, the Company also sells to other European
markets through distributors and agents located in over 20 countries. Such
distributors and agents, as well as those mentioned under "International"
below, handle various non-luggage products in addition to the Company's
products. In general, they sell the Company's products pursuant to agreements
whereby they do not handle luggage other than the Company's products in
exchange for the Company's commitment not to deal with other distributors and
agents in their territory.

International. In markets outside the United States and Western Europe, the
Company primarily sells its products directly, through agents and
distributors, and under license. The Company entered the Japanese market in
1964 through a licensing arrangement with Ace Luggage Company ("Ace"), Japan's
principal luggage manufacturing company. Samsonite brand products made by Ace
are sold primarily in department stores throughout Japan. Products sold under
license are shipped from the United States, Western Europe or Asia depending
upon product type, availability and exchange rate. In some instances, the
Company has entered new markets through third party distributors and has
acquired these third party distributors as markets have matured. The Company
currently has joint ventures in Singapore, India and China. In India and
China, the ventures are currently building manufacturing facilities and expect
to commence production and distribution of Samsonite luggage in early fiscal
1998. The Company is also in negotiations with Samsonite's current distributor
in Argentina to begin a joint venture in Brazil and other major South American
markets in fiscal 1998.

ADVERTISING AND MARKETING

The Company commits substantial resources to aggressive brand advertising
programs that promote the features, durability and quality of the Company's
products and target particular segments of the luggage market based on
consumer demographics. The Company incurred approximately $46 million
worldwide for advertising expenses in fiscal 1996 and has incurred
approximately $40 million per year on average during the last four years. A
1994 market survey conducted by an independent survey organization engaged by
the Company indicated that over 93% and 79% of travelers surveyed in the
United States recognized the Samsonite and American Tourister brand names,
respectively, compared to less than 15% for the next most recognized luggage
brand. This market survey was conducted by asking adults who made at least one
overnight trip during the previous six months to recognize a brand of luggage
when presented with a list of luggage brands. Similar surveys show that
recognition of the Samsonite brand name in most major Western European
countries ranges from 60% to 80%.

The Company's marketing and distribution strategy focuses on the broad
middle segment of the luggage market. In the United States, the Samsonite
brand has historically been positioned as high quality, innovative luggage,
targeted at frequent business travelers; the American Tourister brand has been
positioned as quality luggage at an affordable price; and the Lark brand has
been positioned as premium luggage targeted at first and business class
travelers. In Europe, the Samsonite brand enjoys more of a premium image than
in the United States, and is targeted at first class and frequent business
travelers.

Reinforcing the Company's marketing strategy, Samsonite brand advertising
highlights innovative features and benefits of products that meet the needs of
business and frequent travelers. Samsonite advertisements run on television,
in news weeklies and in inflight and business publications during key consumer
purchase periods throughout the year. The Company also helps its retailing
customers coordinate their advertising with the Company's national advertising
campaigns.

The Company's advertising campaign in Europe uses television, print and
billboards to promote an image of high quality and style and highlights the
newest and most innovative products. The Company was the first luggage company
in Europe to use television to advertise and build brand awareness.

41
<PAGE>

As part of the implementation of its new strategic initiatives, Samsonite
plans to expand its presence in the worldwide luggage market from both a
consumer and trade standpoint through improved consumer marketing. This
marketing program is expected to include more consumer-preferred products,
styles and features, more effective global advertising at higher investment
levels, strengthened point-of-sale support and better customer service. In
connection with its shift to a category-based management structure, for the
first time in November 1996, advertisements introducing the EZ CART(TM)
suitcase in the United States identified Samsonite, American Tourister and
Lark as a family of brands, each offering a version of this innovative new
product.

MANUFACTURING AND SOURCING PRODUCTS

The Company's global sourcing network consists of 13 Company-operated
manufacturing facilities and various third-party suppliers located principally
in the Far East, Eastern Europe and the Dominican Republic. By operating its
own facilities to produce hardside luggage and more complex softside products,
the Company is better able to control manufacturing quality and reduce lead
times and delivery costs. The Company's global sourcing network also enables
it to opportunistically source less complex products from countries with low
product costs and favorable currency exchange rates. Company-operated
manufacturing facilities are located in Belgium, Canada, France, Hungary,
Italy, Mexico, Spain and the United States. In fiscal 1996, approximately 63%
of the Company's sales revenues were from products manufactured at its own
facilities.

The Company manufactures all of the hardside luggage products that it
distributes. Major hardside production facilities are located in Denver,
Colorado and Oudenaarde, Belgium, with limited hardside production facilities
located in Henin-Beaumont, France. Hardside products are made by molding
plastic resins to form a two-piece shell. Handles, locks and other features
are attached to the shell and the halves are joined by a hinge. The Company
produced approximately 3.9 million units of hardside luggage in fiscal 1996.
In fiscal 1996, approximately 46% of the Company's revenues from softside
luggage products were from products manufactured at the Company's own
facilities. Softside suitcases are made by stretching a synthetic material
over a rigid metal or plastic frame. Casual bags are made of the same
synthetic materials but do not have rigid frames. The Company produced
approximately 3.7 million units of softside luggage in fiscal 1996. The
Company employs approximately 6,000 people in the manufacture of hardside and
softside luggage.

The Company sources the remainder of its luggage products primarily from the
Far East, Eastern Europe and the Dominican Republic. The Company believes that
the significant volume of its softside luggage purchases has enabled it to
obtain a reliable supply of high quality, low cost products and prompt order
fulfillment. The Company is able to select different third-party suppliers to
take advantage of changes in manufacturing, payment terms and shipping costs.
The Company does not rely on any single third-party supplier, the loss of
which would be material to the Company.

In September 1996, Samsonite implemented centralized direction and
coordination of all sourcing of finished products globally. The Company plans
to achieve maximum advantage from its purchasing leverage by aggregating
orders from the Company's different locations and by better planning and
timing its requirements and purchases. Manufacturing processes and materials
and component supply arrangements are factored into new product design or
existing product improvements. As a result, products are designed to be
manufactured more efficiently.

The Company has started a major effort to standardize its products around
the world. Components also will be standardized to the extent practical
without sacrificing product quality and consumer-preferred product attributes.
This standardization will reduce product variations across brands and markets,
thus simplifying the Company's operations, reducing costs and reducing working
capital requirements.

The Company maintains a rigorous quality control program. Products are
designed to assure durability and strength, and a prototype of each new
product is put through a series of simulation and stress tests. In the
Company's manufacturing facilities and its Asian sourcing office, it uses
quality control inspectors, engineers and lab technicians to perform
inspection and laboratory testing on raw materials, parts and finished goods.

42
<PAGE>

In January 1996, the Company initiated a plan to restructure the
manufacturing and some administrative functions of its American Tourister
division. The restructuring included moving American Tourister's hardside
luggage manufacturing operations from Jacksonville, Florida to the Company's
Denver facility and consolidating some administrative functions. A provision
for the restructuring of $2.4 million was charged to expense during the fourth
quarter of fiscal 1996. Annual estimated cost savings from this restructuring
are estimated to be $3.3 million. In October 1996, the Company announced a
restructuring and consolidation involving its businesses around the world.
Major components of the restructuring plan, which is planned to generate
savings of $12.7 million when fully implemented in late fiscal 1998, include
consolidation of hardside manufacturing to Denver from Canada and Mexico,
reduced staffing levels, completion of consolidation of American Tourister,
and consolidation of offices and functions in Europe and the Far East. A
provision of $10.7 million was charged to expense in the third quarter of
fiscal 1997.

COMPETITION

Competition in the luggage market is highly fragmented with the vast
majority of individual competitors having less than 10% of the Company's
annual luggage sales. In the United States, the Company competes based on
brand name, consumer advertising, product innovation, quality,
differentiation, customer service and, to a lesser extent, price. Price is
more important at the lower end of the luggage market where fewer
differentiating features are offered. The Company believes that no luggage
manufacturer, other than itself, has more than 10% of the United States
luggage market. In Europe, the Company competes based on its premium image,
brand name, product quality, access to established distribution channels and
new product offerings. The Company's principal competition in softside luggage
in both Europe and the United States markets is private label luggage
manufactured in low labor cost countries, principally in Asia. The manufacture
of softside luggage is labor intensive but not capital intensive, so that the
barriers to entry by additional competitors are relatively low. At the very
low end of the market is non-brand name luggage, characterized by non-
differentiation of features, low margins and high sales volume.

CUSTOMERS

Customers include most major department stores in the United States and
Europe which carry luggage, most specialty stores featuring luggage products,
and many other retailers (mass merchants, discounters and other retailers).
Samsonite also sells directly to consumers through its 147 owned retail stores
in the United States and and two owned retail stores in Europe. The Company is
not dependent on any single customer, and no single customer accounts for more
than 5% of the Company's sales.

TRADEMARKS AND PATENTS

Trademarks and patents are important to the Company. The Company is the
registered owner of its Samsonite, American Tourister, Lark and other luggage
trademarks and has approximately 2,172 trademark registrations in the United
States and abroad, as of November 30, 1996. The Company also owns
approximately 200 United States patents and approximately 609 patents in
selected foreign countries. In addition, the Company has approximately 295
patent applications pending worldwide. The Company pursues a policy of seeking
patent protection where appropriate for inventions embodied in its products.
The Company's patents include American Tourister's Easy Turn(R) wheel system
and Samsonite's Piggyback(R), Ultravalet(R) and Oyster(R) luggage. Although
some companies have sought to imitate some of the Company's patented products,
Samsonite has generally been successful in enforcing its intellectual property
rights. See "Risk Factors--Risks Associated with Intellectual Property
Rights."

EMPLOYEES AND LABOR RELATIONS

At October 31, 1996, the Company had approximately 8,000 employees
worldwide, with approximately 2,300 employees in the United States and
approximately 5,700 employees in other countries. In the United States,
approximately 840 employees are members of unions. In Europe, approximately
70% of the Company's 1,960 production employees at its facilities in Belgium,
France, Italy and Spain are unionized. The Company believes its employee
relations are good.

43
<PAGE>

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Company's directors and executive officers and their ages as of November
30, 1996 are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
President, Chief Executive Officer and
Richard R. Nicolosi............ 49 Director
Thomas J. Leonard.............. 47 President, Samsonite, the Americas
Luc Van Nevel.................. 49 President, Samsonite International
Chief Administrative Officer and
John P. Murtagh................ 47 Secretary
Thomas R. Sandler.............. 49 Chief Financial Officer and Treasurer
Vice President and Managing Director of
Karlheinz Tretter.............. 53 Samsonite Europe
Vice President, Hardside Luggage and
James E. Barch................. 40 Business Cases
Vice President, Softside Luggage and
Robert P. Baird, Jr............ 35 Casual Bags
Gary D. Ervick................. 47 President, Samsonite Distributing Company
Vice President, Legal and Assistant
D. Michael Clayton............. 47 Secretary
R. Theodore Ammon.............. 47 Director
Bernard Attal.................. 32 Director
Leon D. Black.................. 45 Director
Robert H. Falk................. 58 Director
Carl C. Icahn.................. 60 Director
Mark H. Rachesky............... 37 Director
Robert L. Rosen................ 50 Director
Marc J. Rowan.................. 34 Director
Stephen J. Solarz.............. 56 Director
</TABLE>

Richard R. Nicolosi. Mr. Nicolosi was appointed President and Chief
Executive Officer effective May 15, 1996. From 1994 to 1996, Mr. Nicolosi was
Senior Vice President of Scott Paper Company. From 1992 to 1994, Mr. Nicolosi
was President of Nicolosi & Associates, a privately owned business consulting
firm. From 1969 to 1992, Mr. Nicolosi was employed by Procter & Gamble in
various positions, the latest being President, Pulp and Paper Sector,
Corporate Group Vice President, as well as a member of the Executive
Committee. He is a member of the Advisory Board of Directors of Domino's
Pizza, Inc.

Thomas J. Leonard. Mr. Leonard was appointed to his present position as
President, Samsonite, the Americas in May 1995. He served as President,
Samsonite North America from January 1994 through May 1995. He joined
Samsonite in 1984 as Vice President--Marketing, then became Vice President--
Marketing and Sales in 1985 before becoming Senior Vice President and General
Manager of Samsonite U.S.A. in June 1987. He was appointed as President,
Samsonite U.S.A. in July 1989. Prior to 1984, Mr. Leonard held sales and
marketing management positions for nine years with Wilson Sporting Goods and
sales management positions for four years with Procter & Gamble.

Luc Van Nevel. Mr. Van Nevel was appointed to his present position as
President, Samsonite International in June 1994. Since 1984, he has held the
additional position of Managing Director of Samsonite Europe N.V., a wholly
owned subsidiary of Samsonite. He was appointed as President, Samsonite Europe
in July 1989. He joined Samsonite Europe N.V. in 1975 as its Manager,
Financial Planning and progressed to the position of Controller of Samsonite
Europe N.V. Mr. Van Nevel worked in audit positions with Touche Ross & Co. in
Europe for five years before joining Samsonite.

John P. Murtagh. Mr. Murtagh joined Samsonite in August 1996 as Vice
President, Chief Administrative Officer and Secretary of the Company. He was
most recently Senior Vice President, General Counsel and

44
<PAGE>

Secretary of Scott Paper Company from June 1994 through December 1995. Prior
to June 1994, he worked at International Paper as Director of Recycling
programs in 1993 and 1994, and as Senior Counsel prior to 1993.

Thomas R. Sandler. Mr. Sandler was appointed Chief Financial Officer and
Treasurer in July 1995. Mr. Sandler had been appointed Chief Financial Officer
of the Company's former wholly owned subsidiary, Samsonite, on May 1, 1995.
From July 1, 1994, he served as managing partner of the Denver office of BDO
Seidman, an international public accounting firm. Prior to joining BDO
Seidman, Mr. Sandler was an audit and consulting partner in the international
public accounting firm of KPMG Peat Marwick LLP, specializing in corporate
restructurings.

Karlheinz Tretter. Mr. Tretter was appointed Vice President and Managing
Director of Samsonite Europe in May 1994. Since 1990, Mr. Tretter has served
as Vice President of Marketing and/or Sales for Samsonite Europe.

James E. Barch. Mr. Barch was appointed Vice President and General Manager
of Hardside Luggage and Business Cases in August 1996. Mr. Barch was Vice
President, General Manager of Bath and Facial Tissue at Scott Paper Company
from 1994 to 1996. Prior to Scott Paper he was with Church & Dwight as Vice
President of Marketing and Vice President, General Manager of Personal Care
Products. He spent more than 17 years at Procter & Gamble in various positions
including as marketing manager for Procter & Gamble's hair care and skin care
products.

Robert P. Baird, Jr. Mr. Baird was appointed to his present position as Vice
President and General Manager of Softside Luggage and Casual Bags in September
1996. Mr. Baird was responsible for marketing Cadillac Seville and Eldorado
for General Motors during 1996. From 1993 to 1995, Mr. Baird was employed by
Scott Paper in various positions, the latest being General Manager, Wet Wipes
division. Mr. Baird has also held leadership positions with Bristol-Myers
Squibb and Procter & Gamble.

Gary D. Ervick. Mr. Ervick was appointed President of the Samsonite
Distributing Company in September 1996. Mr. Ervick was President of American
Tourister from June 1995 until September 1996. From 1990 through 1995, he was
Vice President of Sales for the Chiquita Brands International, Inc. and prior
to 1990 spent more than 15 years in various positions at Procter & Gamble.

D. Michael Clayton. Mr. Clayton has been General Counsel since the Company
was merged with its former Samsonite subsidiary on July 14, 1995. Effective
that date, he was also elected as Vice President-Legal and Assistant Secretary
of the Company. For its former Samsonite subsidiary, he served as General
Counsel and Secretary from May 1985, and as its Vice President-Legal since
July 1989. He joined Samsonite in 1974.

R. Theodore Ammon. Mr. Ammon was a general partner of Kohlberg Kravis
Roberts & Company (a New York and San Francisco-based investment firm) from
1990 to 1992, and an executive of such firm prior to 1990. Since 1992, Mr.
Ammon has been a private investor. Mr. Ammon is also a member of the Board of
Directors of Host Marriott Corporation, Foodbrands America, Inc., and
Culligan. In addition, Mr. Ammon serves on the Board of Directors of the New
York YMCA and on the Board of Trustees of Bucknell University. Mr. Ammon has
been Chairman of the Board and Chief Executive Officer of Big Flower Press
Holdings, Inc. since 1993.

Bernard Attal. Mr Attal has been a director of the Company since March 28,
1996, when the Board of Directors elected him to the Board. Mr. Attal is
President of Heights Advisors, which acts as a financial advisor and a
representative for certain European institutional investors with respect to
their investments in the United States. From 1992 to 1995, Mr. Attal was a
Vice President at Credit Lyonnais Securities. Prior to 1992, Mr. Attal was
Chief Financial Officer of Altus Patrimoine & Gestion, a money management
firm. Mr. Attal is also a director of New California Life Holdings, Inc.

Leon D. Black. Mr. Black is one of the founding principals of Apollo
Advisors, L.P., which, together with its affiliates, acts as managing general
partner of Apollo Investment Fund, L.P., AIF II, L.P. and Apollo Investment
Fund III, L.P., private securities investment funds, and of Lion Advisors,
L.P., which acts as financial

45
<PAGE>

advisor to and representative for certain institutional investors with respect
to securities investments, and of Apollo Real Estate Advisors, L.P., which
serves as managing general partner of Apollo Real Estate Investment Fund,
L.P., a private real estate oriented investment fund. Mr. Black is also a
director of Big Flower Press, Inc., Converse, Inc., Furniture Brands
International, Inc., Vail Resorts, Inc., Telemundo Group, Inc. and Culligan.

Robert H. Falk. Mr. Falk has been an officer since April 1992 of Apollo
Capital Management, Inc. and Lion Capital Management, Inc., which respectively
act as general partners of Apollo Advisors, L.P. and Lion Advisors, L.P. Mr.
Falk is a limited partner of Apollo Advisors, L.P., which, together with its
affiliates, acts as managing general partner of Apollo Investment Fund, L.P.,
AIF II, L.P. and Apollo Investment Fund III, L.P., private securities
investment funds, and a limited partner of Lion Advisors, L.P., which acts as
financial advisor to and representative for certain institutional investors
with respect to securities investments. Prior to 1992, Mr. Falk was a partner
in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP. Mr. Falk is also
a director of Converse, Inc., Culligan, the Florsheim Shoe Company, Inc. and
Salant Corporation.

Carl C. Icahn. Mr. Icahn is, and for more than five years has been, Chief
Executive Officer and Chairman of the Board of Directors of Starfire Holding
Corporation, which he owns, and various of its affiliated corporations,
including ACF Industries, Incorporated and, since November 1990, the General
Partner of American Real Estate Partners, L.P. For more than five years prior
to January 8, 1993, Mr. Icahn was Chairman and Chief Executive Officer of
Trans World Airlines, Inc., an international air carrier. In January 1992, the
airline filed for reorganization under Chapter 11 of the United States
Bankruptcy Code and was reorganized in 1993. Mr. Icahn is a director of Cadus
Pharmaceutical Corporation. ACF Industries is a manufacturer of tank and
covered hopper cars and engages in the leasing and management of such cars.
Mr. Icahn has, directly and through his controlled companies, been an investor
in equity and debt securities of third party issuers, in certain instances
seeking control of such issuers.

Mark H. Rachesky, M.D. Dr. Rachesky has been a director of the Company since
1993. Dr. Rachesky is the founder of MHR Capital Partners LP, an investment
fund targeted toward individual investors which invests in distressed
securities, and is currently forming similar investment funds for
institutional investors and off-shore investors. Dr. Rachesky is the principal
owner and manager of MHR Advisors LLC and MHR Management Company LLC, the
general partner and investment manager, respectively, of MHR Capital Partners
LP. From February 1, 1990 through June 11, 1996, Dr. Rachesky was employed by
Starfire Holding Corporation, a holding company for Carl C. Icahn's
investments, where he served as senior investment advisor and, for the last
three years, as sole Managing Director, and, in such capacity, acted as Mr.
Icahn's chief investment advisor. Dr. Rachesky has served as a director of
Culligan since September 1995 and of Cadus Pharmaceutical Corporation since
August 1993. From June 1987 to January 1990, Dr. Rachesky was employed by an
affiliate of the Robert M. Bass Group, where he was involved in financing and
investing activities.

Robert L. Rosen. Mr. Rosen is Managing General Partner of RLR Partners,
L.P., a private investment partnership founded in April 1987. Since 1987, Mr.
Rosen has been Chairman of the Board and Chief Executive Officer of Damon
Corporation and its predecessor which operates one of the leading clinical
laboratory testing networks in the United States. Damon Corporation was
acquired by Corning, Inc. on August 4, 1993. Since 1993, Mr. Rosen has been a
director of the Municipal Advantage Fund, Inc., Municipal Partners Fund, Inc.,
Municipal Partners Fund II, Inc. and the Spring Mountain Group. Mr. Rosen is
also a director of Culligan.

Marc J. Rowan. Mr. Rowan is one of the founding principals of Apollo
Advisors, L.P., which, together with its affiliates, acts as managing general
partner of Apollo Investment Fund, L.P., AIF II, L.P. and Apollo Investment
Fund III, L.P., private securities investment funds, and of Lion Advisors,
L.P., which acts as financial advisor to and representative for certain
institutional investors with respect to securities investment. Mr. Rowan is
also a director of Culligan, Farley, Inc., Vail Resorts, Inc., New World
Communications Group, Inc. and Furniture Brands International, Inc.

Stephen J. Solarz. Mr. Solarz was elected, in 1974, to the House of
Representatives from Brooklyn's 13th Congressional District and was re-elected
eight times. In the House of Representatives, he served on four

46
<PAGE>

committees: Foreign Affairs, Merchant Marine and Fisheries, Intelligence, and
the Joint Economic Committee. Mr. Solarz ranked fourth in seniority on the
House Foreign Affairs Committee, where he chaired the Subcommittee on Asian
and Pacific Affairs. Since his departure from the House of Representatives,
Mr. Solarz has been: Senior Counselor at APCO Associates, an international
public affairs firm; President of Solarz and Associates, a global consulting
firm; Chairman of the Central Asian American Enterprise Fund; Vice Chairman of
the International Crisis Group; a Distinguished Fellow at the Carnegie
Endowment for International Peace; Professor of International Affairs at
George Washington University; a Member of the Board of Directors of the
Brandeis University Board of Trustees as well as the National Endowment for
Democracy and National Democratic Institute, and a member of the Council on
Foreign Relations and the International Rescue Committee. Mr. Solarz is a
director of Culligan, First Philippine Fund and Geophone.

47
<PAGE>

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information about persons known to
the Company to be the beneficial owner of more than 5% of the Common Stock,
and about the beneficial ownership of the Common Stock held by each of the
Company's directors and executive officers and all of the Company's directors
and executive officers as a group, as of November 30, 1996. The table also
sets forth the beneficial ownership of the Selling Stockholders, after giving
effect to the Offerings, assuming no exercise of the Underwriters' over-
allotment options. Except as otherwise indicated, to the knowledge of the
Company, the persons identified below have sole voting power and sole
investment power with respect to the shares they beneficially own.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
OF COMMON STOCK OF COMMON STOCK
BEFORE THE OFFERINGS AFTER THE OFFERINGS
-------------------------- SHARES --------------------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
---- ------------ ---------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Apollo Investment Fund, L.P.
c/o Apollo Advisors, L.P.
2 Manhattan Road
Purchase, New York 10577
and
Lion Advisors, L.P................................ 7,334,859(1) 45.78% -- 7,334,859 36.70%
1301 Avenue of the Americas, 38th Floor
New York, New York 10019
Carl C. Icahn..................................... 3,451,803(2) 21.54% 3,138,003 313,800 1.57%
c/o Icahn Associates Corp.
114 W. 47th Street, 19th Floor
New York, New York 10036
Steven J. Green................................... 2,743,118(3) 15.35% 1,685,153 168,515(4) *
7964 Fisher Island Drive
Fisher Island, Florida 33109
Leon G. Cooperman................................. 1,136,412(5) 7.09% -- 1,136,412 5.69%
c/o Omega Advisors, Inc.
Wall Street Plaza, 31st Floor
88 Pine Street
New York, New York 10005
Richard R. Nicolosi............................... 263,290(6) 1.64% -- 263,290 1.32%
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Mark H. Rachesky.................................. 75,057 * -- 75,057 *
Mark Capital Partners
335 Madison Avenue, 26th Floor
New York, New York 10017
John P. Murtagh................................... 65,500(7) * -- 65,500 *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
James E. Barch.................................... 34,333(8) * -- 34,333 *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
</TABLE>

48
<PAGE>

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
OF COMMON STOCK OF COMMON STOCK
BEFORE THE OFFERINGS AFTER THE OFFERINGS
-------------------------- SHARES ----------------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
---- ----------- ---------- ------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Robert P. Baird, Jr............................... 33,833(8) * -- 33,833 *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Karlheinz Tretter................................. 32,446(9) * -- 32,446 *
c/o Samsonite Europe N.V.
Westerring 17
B-9700 Oudenaarde, Belgium
Thomas R. Sandler................................. 37,804(9) * -- 37,804 *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Thomas J. Leonard................................. 39,448(9) * -- 39,448 *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Luc Van Nevel..................................... 39,448(9) * -- 39,448 *
c/o Samsonite Europe N.V.
Westerring 17
B-9700 Oudenaarde, Belgium
Gary D. Ervick.................................... 19,771(10) * -- 19,771 *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
D. Michael Clayton................................ 3,832(9) * -- 3,832 *
c/o Samsonite Corporation
11200 East 45th Avenue
Denver, Colorado 80239
Bernard Attal..................................... 171 * -- 171 *
c/o Credit Lyonnais
1301 Sixth Ave., 38th Floor
New York, New York 10019
R. Theodore Ammon................................. 57 * -- 57 *
Big Flower Press Holdings, Inc.
3 E. 54th Street, 19th Floor
New York, New York 10022
Leon D. Black..................................... 57(11) * -- 57 *
1301 Avenue of the Americas, 38th Floor
New York, New York 10019
Robert H. Falk.................................... 57(11) * -- 57 *
1301 Avenue of the Americas, 38th Floor
New York, New York 10019
</TABLE>

49
<PAGE>

(1) Includes 3,668,163 shares held by Apollo Investments and 3,666,696 shares
beneficially held by Lion Advisors, L.P. ("Lion") on behalf of an
investment account under management over which Lion has exclusive
investment, voting and dispositive power. Lion is affiliated with Apollo
Advisors, L.P., the general partner of Apollo Investments.

(2) Includes shares held by Chelonian Corp. (14,964 shares), Valise Limited
Partnership (3,186,146 shares) and High River Limited Partnership
(250,693 shares), each of which corporations is controlled by Mr. Icahn.
Mr. Icahn has advised the Company that this will not be construed as an
admission that Mr. Icahn is the beneficial owner of any securities held
of record by such corporations.

(3) Includes shares held by GFI II, L.P. (622,450 shares), GFI III, L.P.
(125,000 shares), each of which has a general partner which is a
corporation controlled by Mr. Green, and Green Family Foundation (142,000
shares). Mr. Green has advised the Company that this shall not be
construed as an admission that Mr. Green is the beneficial owner of such
shares. Also includes presently exercisable options to purchase 1,853,668
shares of Common Stock held by Mr. Green. Mr. Green's employment with the
Company ceased effective May 15, 1996, and he resigned from the Board of
Directors and its committees effective May 21, 1996.

(4) In connection with the Offerings, Mr. Green will exercise outstanding
options to purchase 1,853,668 shares of Common Stock for an aggregate
exercise price of approximately $44.0 million. The exercise price will be
paid by Mr. Green tendering to the Company 889,450 shares of Common Stock
and approximately $10.6 million in cash (assuming an offering price of
$37.50 per share). Accordingly, after giving effect to the Offerings, the
number of outstanding shares of Common Stock will increase by the sum of
3,000,000 (the number of shares being issued and sold by the Company in
the Offerings) and 964,218 (the net increase in the number of shares held
by Mr. Green after exercise of the stock options described above).

(5) Includes shares purchased by Omega Capital Partners (378,812 shares),
Omega Institutional Partners, L.P. (355,700 shares), Omega Overseas
Partners Ltd. (159,800 shares), Omega Overseas Partners II, Ltd. (12,000
shares), Omega Equity Partners, L.P. (28,300 shares) and Omega Advisors,
Inc. (201,800 shares), each of which entities is controlled by Mr.
Cooperman.

(6) Includes 60,000 shares of restricted Common Stock issued to Mr. Nicolosi
in connection with his employment arrangements. Does not include options
to purchase an aggregate of 425,532 shares of Common Stock granted to Mr.
Nicolosi in connection with his employment arrangements.

(7) Includes options to purchase 50,000 shares of Common Stock presently
exercisable or exercisable within 60 days.

(8) Includes options to purchase 33,333 shares of Common Stock presently
exercisable or exercisable within 60 days.

(9) Beneficial ownership represents presently exercisable options or options
exercisable within 60 days.

(10) Includes options to purchase 18,491 shares of Common Stock presently
exercisable or exercisable within 60 days.

(11) Includes shares issued under the Directors Stock Plan. Does not include
shares held by Apollo or Lion. Each of Messrs. Falk and Rowan, directors
of the Company, together with Mr. Black, a director of the Company, who
is also a director of Apollo Capital Management, Inc., the general
partner of Apollo Advisors, L.P., and of Lion Capital Management, Inc.,
the general partner of Lion, disclaims beneficial ownership of the
securities held by Apollo and Lion.

(12) Excludes shares listed above for Apollo, Lion and Carl C. Icahn. If such
shares were included, the aggregate number of shares beneficially owned
by all directors and executive officers as a group would be 11,431,879,
representing 70.09% before the Offerings and 8,293,876 shares
representing 40.91% after the Offerings.

50
<PAGE>

DESCRIPTION OF CAPITAL STOCK

AUTHORIZED CAPITAL STOCK

The authorized capital stock of the Company consists of 60,000,000 shares of
Common Stock, par value $.01 per share, and 2,000,000 shares of preferred
stock par value $.01 per share (the "Preferred Stock"). As of the date hereof,
there are 16,023,833 shares of Common Stock issued and outstanding. The
following description of the capital stock of the Company and of certain
provisions of the Company's Amended and Restated Certificate of Incorporation
(the "Charter") and the Company's Restated By-Laws (the "By-Laws") is a
summary of the principal terms thereof. Reference is hereby made to the full
text of the Charter and By-Laws, copies of which are filed as exhibits to the
Company's Annual Report on Form 10-K for the fiscal year January 31, 1996,
incorporated by reference herein.

COMMON STOCK

The holders of the Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of stockholders. Subject to
preferences that may be applicable to any outstanding Preferred Stock, holders
of Common Stock are entitled to receive ratably such dividends as may from
time to time be declared by the Board of Directors out of funds legally
available therefor. See "Divided Policy." In the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock would be
entitled to share ratably in all assets of the Company available for
distribution to holders of Common Stock remaining after payment of liabilities
and the liquidation preference of any outstanding Preferred Stock. Holders of
Common Stock have no preemptive rights and have no rights to convert their
Common Stock into any other securities, and there are no redemption provisions
with respect to such shares. All of the outstanding shares of Common Stock are
fully paid and nonassessable.

PREFERRED STOCK

The Board of Directors has the authority to issue the Preferred Stock in one
or more classes or series and to fix the designations, powers, preferences and
rights of the shares of each such class or series, including dividend rates,
conversion rights, voting rights, terms of redemption and liquidation
preferences and the number of shares constituting each such class or series,
without any further vote or action by the stockholders. The Company has not
issued, and has no present plans to issue, any shares of the Preferred Stock.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is The First National
Bank of Boston.

CERTAIN CHARTER AND BY-LAWS PROVISIONS

The Charter and the By-Laws contain certain provisions that could make more
difficult the acquisition of the Company by means of a tender offer, a proxy
contest or otherwise.

CLASSIFIED BOARD OF DIRECTORS AND RELATED PROVISIONS. The Charter provides
that the Board of Directors shall be divided into three classes, designated
Class I, Class II and Class III, which shall be as nearly equal in number as
possible. Class I directors, who will serve for a term ending with the annual
meeting of stockholders to be held in 1999, currently consist of three
directors, Class II directors, who will serve for a term ending with the
annual meeting of stockholders to be held in 1997, consist of three directors
and Class III directors, who will serve for a term ending with the annual
meeting of stockholders to be held in 1998, consist of four directors. A
director may be removed by the stockholders, but only for cause, and only by
the affirmative vote of the holders, voting as a single class of a majority of
the total number of votes entitled to be cast by all holders voting stock
(which shall include the Common Stock and any class or series of Preferred
Stock which by its terms may be voted on all matters submitted to stockholders
of the Company generally).

The purpose of a classified board is to promote conditions of continuity and
stability in the composition of the Board of Directors and in the policies
formulated by the Board of Directors, by guaranteeing that in the

51
<PAGE>

ordinary course at least two-thirds of the directors will at all times have
had at least one year's experience as directors of the Company. However, for
similar reasons, a classified board may deter certain mergers, tender offers
or other takeover attempts which some or a majority of the holders of the
Company's stock may deem to be in their best interest, since it would take two
annual meetings of stockholders to elect a majority of the Board of Directors.
Similarly, a classified board structure would delay stockholders who do not
like the policies of the Board of Directors from removing a majority of the
Board of Directors at a single annual meeting.

ADVANCE NOTICE PROVISIONS FOR STOCKHOLDER NOMINATIONS AND STOCKHOLDER
PROPOSALS. The By-Laws establish an advance notice procedure for stockholders
to make nominations of candidates for election as directors, or bring other
business before an annual meeting of stockholders of the Company (the
"Stockholder Notice Procedure").

The Stockholder Notice Procedure provides that only persons who are
nominated by, or at the direction of the Company's Board, or by a stockholder
who has given timely written notice to the Secretary of the Company prior to
the meeting at which directors are to be elected, will be eligible for
election as directors of the Company. The Stockholder Notice Procedure
provides that at an annual meeting, only such business may be conducted as has
been specified in the notice of the meeting given by or at the direction of
the Board of Directors (or any duly authorized committee thereof) or brought
before the meeting by, or at the direction of, the Board of Directors (or any
duly authorized committee thereof) or by a stockholder who has given timely
written notice to be Secretary of the Company of such stockholder's intention
to bring such business before such meeting.

Under the Stockholder Notice Procedure, for notice of stockholder
nominations to be made or business to be conducted at an annual meeting to be
timely, such notice must be received by the Company not less than 60 days nor
more than 90 days prior to the first anniversary of the preceding year's
annual meeting, in the event that the date of the annual meeting is advanced
by more than thirty days or delayed by more than sixty days from such
anniversary date, notice must be delivered by the stockholder to the Company
not earlier than the ninetieth day prior to such annual meeting and not later
than the close of business on the later of the sixtieth day prior to such
annual meeting or the tenth day following the day on which public announcement
of the date of such meeting is first made. Under the Stockholder Notice
Procedure, for notice of a stockholder nomination to be made at a special
meeting at which directors are to be elected to be timely, such notice must be
received by the Company not earlier than the ninetieth day prior to such
meeting and not later than the close of business on the later of the sixtieth
day prior to such special meeting or the tenth day following the day on which
public announcement is first made of the date of the special meeting.

In addition, under the Stockholder Notice Procedure, a stockholder's notice
to the Company proposing to nominate a person for election as a director or
conduct certain business at an annual meeting must contain certain specified
information. If the Board of Directors determines that a person was not
nominated, or other business was not brought before the meeting, in accordance
with the Stockholder Notice Procedure, such person will not be eligible for
election as a director, or such business will not be conducted at such
meeting, as the case may be.

STATUTORY PROVISIONS

Section 203 of the Delaware General Corporation Law (the "DCL") prohibits
certain transactions between a Delaware corporation and an "interested
stockholder," which is defined as a person who, together with any affiliates
and/or associates of such person, beneficially owns, directly or indirectly,
15% or more of the outstanding voting shares of a Delaware corporation. This
provision prohibits certain business combinations (defined broadly to include
mergers, consolidations, sales or other dispositions of assets having an
aggregate value in excess of 10% of the consolidated assets of the
corporation, and certain transactions that would increase the interested
stockholder's proportionate share ownership in the corporation) between an
interested stockholder and a corporation for a period of three years after the
date the interested stockholder acquired its stock, unless (i) the business
combination is approved by the corporation's board of directors prior to the
date the interested stockholder acquired shares, (ii) the interested
stockholder acquired at least 85% of the voting stock of the corporation in
the transaction in which it became an interested stockholder or (iii) the
business combination is

52
<PAGE>

approved by a majority of the board of directors and by the affirmative vote
of two-thirds of the votes entitled to be cast by disinterested stockholders
at an annual or special meeting. A Delaware corporation, pursuant to a
provision in its certificate of incorporation or by-laws, may elect not to be
governed by Section 203 of the DCL in which case such election becomes
effective one year after its adoption. In the Charter, the Company has elected
not to be governed by Section 203 of the DCL.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offerings, the Company will have 19,988,051 shares of
Common Stock outstanding (or 20,288,051 shares if the Underwriters' over
allotment options are exercised in full) all of which will be freely tradeable
without restriction or further registration under the Securities Act, except
for any shares held or purchased by an "affiliate" of the Company as that term
is defined in Rule 144 ("Rule 144") under the Securities Act (an "Affiliate").
Any shares purchased in the Offerings or otherwise held by an Affiliate of the
Company may not be resold except pursuant to an effective registration
statement filed by the Company or an applicable exemption from registration,
including an exemption under Rule 144.

In general, under Rule 144 as currently in effect, an Affiliate of the
Company is entitled to sell, within any three-month period, a number of shares
of Common Stock that does not exceed the greater of 1% of the then outstanding
shares of the Company's Common Stock (approximately 199,880 shares immediately
after the Offerings) or the average weekly trading volume in the Company's
Common Stock during the four calendar weeks preceding such sale. Sales under
Rule 144 are also subject to certain restrictions on the manner of sale,
notice requirements, and the availability of current public information about
the Company.

Subject to certain exceptions, Apollo (which owns approximately 7.3 million
outstanding shares of Common Stock) has agreed with the Underwriters not to
offer, sell, contract to sell or otherwise dispose of any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for or
warrants, options or rights to acquire, Common Stock, directly or indirectly,
for a period of 90 days after the date of this Prospectus without the prior
written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated on
behalf of the Underwriters. In addition, the Company will agree not to effect
a registration, without the prior consent of Merrill Lynch, Pierce, Fenner &
Smith Incorporated on behalf of the Underwriters, with respect to the sale of
any shares of Common Stock by any stockholder of the Company (other than a
registration on Form S-8) for a period of 90 days after the date of this
Prospectus.

The Company has filed with the Commission a registration statement on Form
S-8 with respect to an aggregate of approximately 3,346,700 shares of Common
Stock issuable or reserved for issuance upon exercise of stock options. In
addition, the Company intends to file shortly with the Commission a
registration statement on Form S-8 with respect to an additional 1,700,000
shares of Common Stock issuable in connection with the Company's stock option
plan and the Director Stock Plan and a registration statement on Form S-8 with
respect to an additional 75,000 shares of Common Stock issuable in connection
with employee benefit plans.

No prediction can be made as to the effect, if any, that market sales of
shares of Common Stock or the availability of shares of Common Stock for sale
will have on the market price of the Common Stock prevailing from time to
time. Nevertheless, sales of substantial amounts of the Company's Common Stock
in the public market could adversely affect prevailing market prices of the
Company's Common Stock.

53
<PAGE>

UNDERWRITING

Subject to the terms and conditions set forth in a U.S. purchase agreement
(the "U.S. Purchase Agreement") among the Company, each of the Selling
Stockholders and each of the underwriters named below (the "U.S.
Underwriters"), and concurrently with the sale of 1,564,631 shares of Common
Stock to the International Managers (as defined below), the Company and the
Selling Stockholders have agreed to sell to each of the U.S. Underwriters, and
each of the U.S. Underwriters has severally agreed to purchase from the
Company and the Selling Stockholders, the aggregate number of shares of Common
Stock set forth opposite its name below:

<TABLE>
<CAPTION>
NUMBER
U.S. UNDERWRITER OF SHARES
---------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................
Bear, Stearns & Co. Inc. .........................................
Donaldson, Lufkin & Jenrette Securities Corporation...............
Goldman, Sachs & Co. .............................................
Lehman Brothers Inc. .............................................
Morgan Stanley & Co. Incorporated.................................
PaineWebber Incorporated..........................................
Smith Barney Inc. ................................................
---------
Total........................................................ 6,258,525
=========
</TABLE>

The Company and the Selling Stockholders also have entered into a purchase
agreement (the "International Purchase Agreement," and together with the U.S.
Purchase Agreement, the "Purchase Agreements") with certain underwriters
outside the United States and Canada (collectively, the "International
Managers" and, together with the U.S. Underwriters, the "Underwriters").
Subject to the terms and conditions set forth in the International Purchase
Agreement, and concurrently with the sale of 6,258,525 shares of Common Stock
to the U.S. Underwriters pursuant to the U.S. Purchase Agreement, the Company
and the Selling Stockholders have agreed to sell to the International
Managers, and each of the International Managers has severally agreed to
purchase from the Company and the Selling Stockholders, an aggregate of
1,564,631 shares of Common Stock. The public offering price per share of
Common Stock and the underwriting discount per share of Common Stock will be
identical under the U.S. Purchase Agreement and the International Purchase
Agreement. The respective percentages of the Common Stock to be sold by each
of the Company and the Selling Stockholders will be identical in the U.S.
Offering and the International Offering.

In the U.S. Purchase Agreement and the International Purchase Agreement, the
several U.S. Underwriters and the several International Managers,
respectively, have agreed, subject to the terms and conditions set forth
therein, to purchase all of the shares of Common Stock being sold pursuant to
each such Purchase Agreement if any such shares of Common Stock being sold
pursuant to each such Purchase Agreement are purchased. Under certain
circumstances, the commitments of non-defaulting U.S. Underwriters or
International Managers (as the case may be) may be increased. The sale of
shares of Common Stock to the U.S. Underwriters is conditioned upon the sale
of shares of Common Stock to the International Managers and vice versa.

The U.S. Underwriters and the International Managers have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for
the coordination of their activities. Pursuant to the Intersyndicate
Agreement, the Underwriters are permitted to sell shares of Common Stock to
each other for purposes of resale at the public offering price set forth on
the cover page of this Prospectus, less an amount not greater than the selling
concession. Under the terms of the Intersyndicate Agreement, the U.S.
Underwriters and any dealer to whom they sell shares of Common Stock will not
offer to sell or sell shares of Common Stock to persons who are non-U.S. or
non-Canadian persons or to persons they believe intend to resell to persons
who are non-U.S. or non-Canadian persons, and the International Managers and
any dealer to whom they sell shares of Common Stock will not offer to sell or
sell shares of Common Stock to U.S. persons or Canadian persons or to persons

54
<PAGE>

they believe intend to resell to U.S. persons or Canadian persons, except, in
each case, for transactions pursuant to the Intersyndicate Agreement.

The U.S. Underwriters have advised the Company and the Selling Stockholders
that the U.S. Underwriters propose initially to offer the shares of Common
Stock to the public at the public offering price set forth on the cover page
of this Prospectus, and to certain dealers at such price less a concession not
in excess of $ per share of Common Stock on sales to certain other dealers.
The U.S. Underwriters may allow, and such dealers may reallow, a discount not
in excess of $ per share of Common Stock on sales to certain other dealers.
After the public offering of Common Stock pursuant to this Prospectus, the
public offering price, concession and discount may be changed.

The Company, the Selling Stockholders and Apollo have agreed, subject to
certain exceptions, not to sell or otherwise dispose of any shares of Common
Stock or securities convertible into or exchangeable or exercisable for Common
Stock, without the prior written consent of Merrill Lynch, Pierce, Fenner &
Smith Incorporated on behalf of the Underwriters, for a period of 90 days
after the date of this Prospectus.

The Company and the Selling Stockholders have granted an option to the U.S.
Underwriters, exercisable within 30 days after the date of this Prospectus, to
purchase up to an aggregate of 625,852 additional shares of Common Stock at
the public offering price set forth on the cover page of this Prospectus, less
the underwriting discount. The U.S. Underwriters may exercise this option only
to cover over-allotments, if any, made on the sale of the Common Stock offered
hereby. To the extent that the U.S. Underwriters exercise this option, each
U.S. Underwriter will be obligated, subject to certain conditions, to purchase
a number of additional shares of Common Stock proportionate to such U.S.
Underwriter's initial amount reflected in the foregoing table. The Company and
the Selling Stockholders also have granted an option to the International
Managers, exercisable within 30 days after the date of this Prospectus, to
purchase up to an aggregate of 156,463 additional shares of Common Stock to
cover over-allotments, if any, on terms similar to those granted to the U.S.
Underwriters.

The Company, the Selling Stockholders and the Underwriters have agreed that
up to 150,000 shares of the 7,823,156 shares of Common Stock to be purchased
by the Underwriters (the "Reserved Securities") shall be reserved for sale at
the public offering price by the Underwriters to certain eligible employees as
part of the distribution of such shares by the Underwriters, subject to the
terms of the Purchase Agreements, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. and
all other applicable laws, rules and regulations. The number of shares of
Common Stock offered hereby available for sale to the general public will be
reduced to the extent such employees purchase such Reserved Securities. To the
extent that such Reserved Securities are not orally confirmed for purchase by
such employees by the end of the first business day after the date of the
Purchase Agreements, such Reserved Securities may be offered to the public as
part of the Offerings contemplated hereby. Of such 150,000 Reserved Shares, it
is expected that Mr. Nicolosi will purchase approximately 50,000 shares and
other executive officers will purchase an aggregate of approximately 25,000
shares.

The public offering price of the Common Stock in the Offerings will be
determined through negotiations among the Company, the Selling Stockholders
and the Underwriters. Among the factors considered in determining the public
offering price of the Common Stock in the Offerings, in addition to prevailing
market conditions, and the current market price of the Common Stock, are
price-earnings ratios of publicly traded companies that the Underwriters
believe to be comparable to the Company, certain financial information of the
Company, the history of, and the prospects for, the Company and the industry
in which it competes, and assessment of the Company's management, its past and
present operations, the prospects for, and timing of, future revenues of the
Company, the present state of the Company's development, and the above factors
in relation to market values and various valuation measures of other companies
engaged in activities similar to those of the Company. There can be no
assurance that the Common Stock will trade in the public market subsequent to
the Offerings at or above the public offering price set forth on the cover of
this Prospectus.

The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities under
the Securities Act, or to contribute to payments the Underwriters may be
required to make in respect thereof. The Company has agreed to indemnify the
Selling Stockholders, under certain circumstances, in respect of payments made
by them pursuant to these agreements.

55
<PAGE>

LEGAL MATTERS

Certain legal matters with respect to the Common Stock have been passed upon
for the Company by Skadden, Arps, Slate, Meagher & Flom LLP, New York, New
York, and for the Underwriters by Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Skadden, Arps, Slate, Meagher & Flom LLP has from time to time represented
certain of the Underwriters in connection with unrelated legal matters. Akin,
Gump, Strauss, Hauer & Feld, L.L.P. represents Apollo Advisers, L.P. and
certain of its affiliates in connection with unrelated legal matters.

EXPERTS

The consolidated financial statements of the Company as of January 31, 1996
and 1995, and for the years ended January 31, 1996 and 1995, for the seven
months ended January 31, 1994, and for the five months ended June 30, 1993,
have been included and incorporated by reference herein and in the
Registration Statement on Form S-3 of which this Prospectus is a part (the
"Registration Statement"), and the related financial statement schedule has
been incorporated by reference herein and in the Registration Statement, in
reliance upon the reports of KPMG Peat Marwick LLP, independent certified
public accountants, included or incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing. The reports of
KPMG Peat Marwick LLP contain an explanatory paragraph that states that Astrum
was required to establish a new basis of accounting and adjust the recorded
amounts of assets and liabilities to their fair market values at June 30,
1993. The Company's consolidated financial statements include the continuing
impact of the recapitalization. As a result, the consolidated financial
statements for periods subsequent to June 30, 1993 are presented on a
different cost basis than for prior periods and, therefore, are not
comparable.

ADDITIONAL INFORMATION

The Company is subject to the informational requirements of the Exchange
Act, and, in accordance therewith, files reports and other information with
the Commission. The Company has furnished and intends to furnish reports to
its stockholders, which will include consolidated financial statements audited
by its independent accountants, and such other reports as it may determine to
furnish or as required by law, including Sections 13(a) and 15(d) of the
Exchange Act. Reports, proxy statements and other information may be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 and the Commission's regional
offices located at Seven World Trade Center, 13th Floor, New York, New York
10048 and at Citicorp Center, 500 West Madison, Suite 1400, Chicago, Illinois
60661. Copies of such materials also may be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, the Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
address of such site is http://www.sec.gov.

The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act, with respect to the shares of Common Stock being
offered in the Offerings. This Prospectus, which forms part of the
Registration Statement, does not contain all of the information set forth in
the Registration Statement and the exhibits and schedules thereto, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to herein are not necessarily
complete. With respect to each such contract, agreement or other document
filed as an exhibit to the Registration Statement or to a document
incorporated by reference herein, reference is made to such exhibit or
document for a more complete description of the matter involved, and each such
statement shall be deemed qualified in its entirety by such reference.

The Registration Statement and the exhibits and schedules thereto filed by
the Company may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, as well as the Regional Offices of the Commission at Citicorp
Center, 500 West Madison, Suite 1400, Chicago, Illinois 60661 and Seven World
Trade Center, 13th Floor, New York, New York, 10048. Copies of such
information can be obtained by mail from the Public Reference Branch of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates.

56
<PAGE>

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report............................................. F-2
Consolidated Balance Sheets as of October 31, 1996 (unaudited), January
31, 1996 and
January 31, 1995........................................................ F-3
Consolidated Statements of Operations for the nine months ended October
31, 1996 and 1995 (unaudited), for the years ended January 31, 1996 and
1995, for the seven months ended January 31, 1994, and for the five
months ended June 30, 1993.............................................. F-4
Consolidated Statements of Stockholders' Equity.......................... F-5
Consolidated Statements of Cash Flows for the nine months ended October
31, 1996 and 1995 (unaudited), for the years ended January 31, 1996 and
1995, for the seven months ended January 31, 1994, and for the five
months ended June 30, 1993.............................................. F-6
Notes to Consolidated Financial Statements............................... F-8
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

THE BOARD OF DIRECTORS
SAMSONITE CORPORATION AND SUBSIDIARIES:

We have audited the accompanying consolidated balance sheets of Samsonite
Corporation (formerly Astrum International Corp.) and Subsidiaries as of
January 31, 1996 and 1995, and the related consolidated statements of
operations, stockholders' equity and cash flows for the years ended January
31, 1996 and 1995, for the seven months ended January 31, 1994, and for the
five months ended June 30, 1993. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Samsonite
Corporation and Subsidiaries as of January 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for the years
ended January 31, 1996 and 1995 and the seven months ended January 31, 1994,
in conformity with generally accepted accounting principles; and the
consolidated results of operations and cash flows of E-II Holdings, Inc., a
wholly owned subsidiary of McGregor Acquisition Corp. and Subsidiaries for the
five months ended June 30, 1993, in conformity with generally accepted
accounting principles.

As discussed in Note 9 to the consolidated financial statements, effective
June 30, 1993, Astrum International Corp. was required to adopt "fresh-start"
reporting principles in accordance with AICPA Statement of Position 90-7,
Financial Reporting by Entities in Reorganization Under the Bankruptcy Code.
As a result, the consolidated financial statements for the period subsequent
to the adoption of fresh-start reporting are presented on a different cost
basis than that for prior periods and, therefore, are not comparable.

KPMG Peat Marwick LLP

Denver, Colorado
March 19, 1996

F-2
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
OCTOBER 31, 1996 AND JANUARY 31, 1996 AND 1995
(IN THOUSANDS)

<TABLE>
<CAPTION>
REORGANIZED COMPANY
------------------------------
JANUARY 31,
OCTOBER 31, ------------------
1996 1996 1995
----------- -------- --------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................... $ 3,145 $ 15,179 $ 49,814
Trade receivables, net of allowances for
doubtful accounts of $9,636, $8,152 and
$6,888 (note 8)............................. 98,186 73,513 63,835
Notes and other receivables.................. 10,163 17,711 20,042
Inventories (notes 4 and 8).................. 139,138 115,736 106,009
Deferred income tax assets (note 11)......... 32,941 38,760 58,120
Prepaid expenses and other current assets.... 14,349 15,990 15,370
Assets held for sale......................... 9,246 9,455 9,583
Net assets of discontinued operations (note
2).......................................... -- -- 169,187
-------- -------- --------
Total current assets....................... 307,168 286,344 491,960
Investments in affiliates...................... 1,236 -- 620
Property, plant and equipment, net (notes 5 and
8)............................................ 138,170 140,912 137,686
Intangible assets, less accumulated
amortization of $200,834, $171,278 and
$107,402 (note 6)............................. 129,874 159,492 222,982
Other assets and long-term receivables, net of
allowances for doubtful accounts of $5,555,
$10,104 and $9,698 (note 11).................. 22,056 34,695 12,752
-------- -------- --------
$598,504 $621,443 $866,000
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt (notes 7 and 8).............. $ 7,329 $ 23,487 $ 36,369
Current installments of long-term obligations
(note 8).................................... 19,475 16,306 109,745
Accounts payable............................. 39,280 33,520 32,684
Accrued interest expense..................... 7,339 1,742 8,657
Accrued compensation and employee benefits... 22,383 19,619 19,546
Other accrued expenses (note 14)............. 88,798 92,151 88,545
-------- -------- --------
Total current liabilities.................. 184,604 186,825 295,546
Long-term obligations, less current
installments (notes 7 and 8).................. 273,167 294,653 307,430
Deferred income tax liabilities (note 11)...... 36,784 33,038 41,128
Other noncurrent liabilities (notes 12, 14 and
19)........................................... 79,330 79,672 70,666
Minority interests............................. 3,795 2,139 2,758
-------- -------- --------
Total liabilities.......................... 577,680 596,327 717,528
-------- -------- --------
Stockholders' equity (note 8):
Preferred stock.............................. -- -- --
Common stock................................. 160 159 155
Additional paid-in capital................... 264,584 261,842 312,989
Accumulated deficit.......................... (238,160) (224,547) (163,100)
Foreign currency translation equity
adjustment.................................. (4,916) (2,338) (1,572)
Note receivable from officer (note 10)....... (844) (10,000) --
-------- -------- --------
Total stockholders' equity................. 20,824 25,116 148,472
-------- -------- --------
Commitments and contingencies (notes 8, 9, 10,
12, 14 and 19)................................
$598,504 $621,443 $866,000
======== ======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-3
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
-------------------------------------------------------- -----------
SEVEN FIVE
NINE MONTHS ENDED YEAR ENDED MONTHS MONTHS
OCTOBER 31, JANUARY 31, ENDED ENDED
----------------------- ------------------- JANUARY 31, JUNE 30,
1996 1995 1996 1995 1994 1993
----------- ----------- -------- --------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Net sales............... $553,124 $505,707 $675,209 $ 635,452 $331,100 $192,519
Cost of goods sold...... 335,363 307,458 414,691 373,967 196,777 113,032
-------- -------- -------- --------- -------- --------
Gross profit.......... 217,761 198,249 260,518 261,485 134,323 79,487
Selling, general and
administrative
expenses............... 174,140 153,197 203,701 197,716 97,480 66,094
Amortization of
intangible assets...... 29,622 47,863 63,824 67,189 39,924 206
Provision for
restructuring
operations (notes 16
and 19)................ 10,670 -- 2,369 -- -- --
-------- -------- -------- --------- -------- --------
Operating income
(loss)............... 3,329 (2,811) (9,376) (3,420) (3,081) 13,187
Other income (expense):
Interest income........ 1,172 4,058 4,709 2,909 4,342 --
Interest expense and
amortization of
premium and issue
costs of debt......... (27,112) (30,851) (39,974) (37,875) (24,839) (4,404)
Other--net (notes 15
and 19)............... 18,453 3,357 3,967 2,729 5,504 360
-------- -------- -------- --------- -------- --------
Income (loss) from
continuing
operations before
reorganization
items, income taxes,
minority interest
and extraordinary
items................ (4,158) (26,247) (40,674) (35,657) (18,074) 9,143
Reorganization items
(note 9)............... -- -- -- -- -- 462,447
-------- -------- -------- --------- -------- --------
Income (loss) from
continuing
operations before
income taxes and
minority interest.... (4,158) (26,247) (40,674) (35,657) (18,074) 471,590
Income tax expense (note
11).................... (8,603) (7,495) (9,095) (10,619) (6,797) (2,313)
Minority interest in
earnings of
subsidiaries........... (852) (428) (1,385) (931) (1,148) (901)
-------- -------- -------- --------- -------- --------
Income (loss) from
continuing
operations........... (13,613) (34,170) (51,154) (47,207) (26,019) 468,376
Operations discontinued
and sold
(note 2):
Royalties earned after
income taxes of $0.... -- -- -- -- -- 50,000
Income (loss) on
operations after
income tax expense of
$0, $12,416, $486, and
$911.................. -- -- -- (43,910) (25,502) 19,236
Loss on
discontinuance--net,
after income tax
expense (benefit) of
$1,062 and ($12,457).. -- -- (2,251) (20,462) -- --
-------- -------- -------- --------- -------- --------
Income (loss) before
extraordinary
items................ (13,613) (34,170) (53,405) (111,579) (51,521) 537,612
Extraordinary items:
Loss on extinguishment
of debt, net of taxes
of $5,589 (note 8).... -- (8,042) (8,042) -- -- --
Gain on forgiveness of
debt, net of taxes of
$0 (note 9)........... -- -- -- -- -- 387,212
-------- -------- -------- --------- -------- --------
Net income (loss)..... $(13,613) $(42,212) $(61,447) $(111,579) $(51,521) $924,824
======== ======== ======== ========= ======== ========
Loss per share:
Continuing operations
before extraordinary
item................ $ (.85) $ (2.16) $ (3.24) $ (3.05) $ (1.68)
Discontinued
operations.......... -- -- (.14) (4.17) (1.65)
Extraordinary item... -- (.52) (.51) -- --
-------- -------- -------- --------- --------
Net loss per share... $ (.85) $ (2.68) $ (3.89) $ (7.22) $ (3.33)
======== ======== ======== ========= ========
</TABLE>

See accompanying notes to consolidated financial statements.

F-4
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
FOREIGN
CURRENCY NOTE
ADDITIONAL ACCUMU- TRANSLATION RECEIVABLE
PREFERRED COMMON PAID-IN LATED EQUITY UNEARNED FROM
STOCK(1) STOCK(2) CAPITAL DEFICIT ADJUSTMENT COMPENSATION OFFICER
--------- -------- ---------- --------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
PREDECESSOR COMPANY
Balance, February 1,
1993................... $-- $-- $ -- $(932,014) $ 8,181 $ -- $ --
Net income............. -- -- -- 924,824 -- -- --
Foreign currency
translation
adjustment............ -- -- -- -- (991) -- --
---- ---- -------- --------- ------- ------ -------
Balance, June 30, 1993.. -- -- -- (7,190) 7,190 -- --
Fresh-start adjustments
to foreign currency
translation
adjustment............ -- -- -- 7,190 (7,190) -- --
Issuance of new
equity................ -- 150 303,600 -- -- -- --
Stock grant under
employment contract... -- 5 9,389 -- -- -- --
---- ---- -------- --------- ------- ------ -------
Adjusted balance June
30, 1993............... -- 155 312,989 -- -- -- --
REORGANIZED COMPANY
Net loss............... -- -- -- (51,521) -- -- --
Foreign currency
translation
adjustment............ -- -- -- -- (7,930) -- --
---- ---- -------- --------- ------- ------ -------
Balance, January 31,
1994................... -- 155 312,989 (51,521) (7,930) -- --
Net loss............... -- -- -- (111,579) -- -- --
Transfer Culligan
foreign currency
adjustment to
discontinued
operations............ -- -- -- -- 1,345 -- --
Foreign currency
translation
adjustment............ -- -- -- -- 5,013 -- --
---- ---- -------- --------- ------- ------ -------
Balance, January 31,
1995................... -- 155 312,989 (163,100) (1,572) -- --
Net loss............... -- -- -- (61,447) -- -- --
Issuance of 425,532
shares to officer in
exchange for note
receivable
(note 10)............. -- 4 9,996 -- -- -- (10,000)
Spinoff of water
treatment business
(note 2).............. -- -- (61,143) -- -- -- --
Foreign currency
translation
adjustment............ -- -- -- -- (766) -- --
---- ---- -------- --------- ------- ------ -------
Balance, January 31,
1996................... -- 159 261,842 (224,547) (2,338) -- (10,000)
UNAUDITED:
Net loss............... -- -- -- (13,613) -- -- --
Issuance of 55,000
shares of common stock
to an officer for cash
(note 19a)............ -- -- 1,004 -- -- -- --
Stock award of 60,000
shares of restricted
common stock to an
officer
(note 19a)............ -- 1 1,094 -- -- (1,095) --
Amortization of
restricted stock award
to compensation
expense (note 19a).... -- -- -- -- -- 251 --
Compensation expense
accrued for stock
bonus awards (note
19b).................. -- -- 325 -- -- -- --
Exercise of employee
stock options and
related income tax
benefits.............. -- -- 319 -- -- -- --
Foreign currency
translation
adjustment............ -- -- -- -- (2,578) -- --
Payment of note
receivable............ -- -- -- -- -- -- 10,000
---- ---- -------- --------- ------- ------ -------
Balance, October 31,
1996 (Unaudited)....... $-- $160 $264,584 $(238,160) $(4,916) $ (844) $ --
==== ==== ======== ========= ======= ====== =======
</TABLE>
- --------
(1) $.01 par value; 2,000,000 shares authorized; no shares issued and
outstanding at October 31, 1996 or January 31, 1996 and 1995.
(2) $.01 par value; 60,000,000 shares authorized; 16,021,950, 15,889,450 and
15,463,918 shares issued and outstanding at October 31, 1996 and January
31, 1996 and 1995, respectively.

See accompanying notes to consolidated financial statements.

F-5
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
-------------------------------------------------------- -----------
SEVEN FIVE
NINE MONTHS ENDED YEAR ENDED MONTHS MONTHS
OCTOBER 31, JANUARY 31, ENDED ENDED
----------------------- ------------------- JANUARY 31, JUNE 30,
1996 1995 1996 1995 1994 1993
----------- ----------- -------- --------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from (used
in) operating
activities:
Net income (loss)...... $(13,613) $(42,212) $(61,447) $(111,579) $(51,521) $924,824
Adjustments to
reconcile net income
(loss) to net cash
provided by continuing
operating activities:
Nonoperating
income/expense
items:
Loss (gain) from
extinguishment
(forgiveness) of
debt................ -- 8,042 8,042 -- -- (387,212)
Income from
reorganization
items............... -- -- -- -- -- (462,447)
Loss (income) from
discontinued
operations.......... -- -- 2,251 64,372 25,502 (69,236)
Loss (gain) on
disposition of fixed
assets.............. (171) 63 245 880 163 (65)
Gain on sale of other
asset............... -- -- (5,368) -- -- --
Depreciation and
amortization of
property and
equipment............ 16,615 14,849 20,277 18,297 9,957 4,937
Amortization of debt
issue costs and
premium.............. 1,449 -- 803 (692) (500) 522
Amortization of
intangible assets.... 29,622 47,863 63,824 67,189 39,924 206
Noncash compensation
expense.............. 576 -- -- -- -- 9,394
Deferred income tax
expense (benefit).... 9,565 -- 2,809 1,946 2,819 (126)
Adjustment of
liability for PBGC
claims............... (11,100) -- -- -- -- --
Provision for
doubtful accounts.... 2,073 669 2,627 1,198 1,040 5,716
Provision for
restructuring
operations........... 10,670 -- 2,369 -- -- --
Changes in operating
assets and
liabilities, net of
effects from
acquisition of
Mexican subsidiary:
Trade and other
receivables.......... (19,079) (23,217) (6,327) (13,988) 11,223 (14,437)
Inventories.......... (23,402) (10,845) (6,404) (6,017) 14,124 (13,200)
Other current
assets............... 1,850 10,088 (620) (4,978) (860) 6,659
Accounts payable and
accrued
liabilities.......... 98 11,080 (11,114) 10,471 246 3,572
Other adjustments--
net................... 5,556 (28) (2,170) 9,342 (1,450) (2,452)
-------- -------- -------- --------- -------- --------
Net cash provided by
continuing
operating
activities before
reorganization
items............... 10,709 16,352 9,797 36,441 50,667 6,655
Operating cash flows
from (used for)
reorganization items:
Interest income........ -- -- -- -- -- 4,405
Professional fees paid
for services.......... -- -- -- (2,714) (19,019) (4,478)
Distribution upon
restructuring......... -- -- -- -- -- (342,300)
Other reorganization
items................. -- -- -- (1,861) (18,156) (4,850)
-------- -------- -------- --------- -------- --------
Net cash provided by
(used in) operating
activities.......... 10,709 16,352 9,797 31,866 13,492 (340,568)
-------- -------- -------- --------- -------- --------
Cash flows from (used
in) investing
activities:
Short-term investment
activity--net......... -- -- -- -- -- 50,963
Proceeds from sales of
fixed assets and other
asset................. 882 -- 15,086 1,342 86 70
Purchases of property,
plant and equipment... (19,689) (15,909) (23,975) (18,453) (8,495) (4,600)
Release of cash related
to restricted
insurance assets...... -- -- -- 10,799 -- --
Royalty payments
received.............. -- -- -- 70,719 23,566 50,000
Purchase of American
Tourister--net of cash
acquired.............. -- -- -- -- (62,743) --
Cash received from
spinoff or sale of
discontinued
operations............ -- 112,000 112,000 96,436 -- --
Net cash received from
(used in) discontinued
operations............ 11,511 (1,603) 10,483 (9,149) 8,131 23,499
Acquisition of Mexico
subsidiary, net of
cash acquired of
$1,469................ -- -- 1,275 -- -- --
Other.................. 3,719 (15,022) (280) -- -- --
-------- -------- -------- --------- -------- --------
Net cash provided by
(used in) investing
activities.......... $ (3,577) $ 79,466 $114,589 $ 151,694 $(39,455) $119,932
-------- -------- -------- --------- -------- --------
</TABLE>

(continued)

F-6
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS--(CONTINUED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
--------------------------------------------------------- -----------
SEVEN FIVE
NINE MONTHS ENDED YEAR ENDED MONTHS MONTHS
OCTOBER 31, JANUARY 31, ENDED ENDED
----------------------- -------------------- JANUARY 31, JUNE 30,
1996 1995 1996 1995 1994 1993
----------- ----------- --------- --------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from (used in)
financing activities:
Proceeds from long-term
debt relating to the
acquisition of American
Tourister.............. $ -- $ -- $ -- $ -- $ 63,834 $ --
Net borrowings
(payments) of senior
credit facility........ (500) (105,514) 58,000 (25,659) (38,175) --
Proceeds from issuance
of senior secured
notes.................. -- -- 190,000 -- -- --
Issuance costs, senior
notes and credit
facility............... -- (12,974) (13,472) -- -- --
Repurchase of senior
secured notes.......... -- -- (375,217) (126,442) -- --
Redemption premium on
senior secured notes... -- (18,320) (18,000) -- -- --
Proceeds from long-term
obligations--other..... 41,466 -- 22,217 1,149 507 36,837
Payments of long-term
obligations--other..... (55,829) -- (15,201) (9,183) (919) (31,748)
(Payments of) proceeds
from short-term debt--
net.................... (16,026) 911 (4,151) 6,141 (2,327) 6,667
Proceeds from sale of
common stock and
exercise of stock
options................ 1,199 -- -- -- -- --
Payment of note
receivable for issuance
of common stock........ 10,000 -- -- -- -- --
Other................... 1,654 (1,385) (1,384) -- (2,676) (218)
Redemption of McGregor
Corporation preferred
stock.................. -- -- -- -- (10,875) --
-------- --------- --------- --------- -------- ---------
Net cash provided by
(used in) financing
activities............ (18,036) (137,282) (157,208) (153,994) 9,369 11,538
-------- --------- --------- --------- -------- ---------
Effect of exchange rate
changes on cash and cash
equivalents............. (1,130) 864 (1,813) 737 (804) 81
-------- --------- --------- --------- -------- ---------
Net increase (decrease)
in cash and cash
equivalents........... (12,034) (40,600) (34,635) 30,303 (17,398) (209,017)
Cash and cash
equivalents, beginning
of period............... 15,179 51,283 49,814 19,511 36,909 245,926
-------- --------- --------- --------- -------- ---------
Cash and cash
equivalents, end of
period.................. $ 3,145 $ 10,683 $ 15,179 $ 49,814 $ 19,511 $ 36,909
======== ========= ========= ========= ======== =========
Supplemental disclosures
of cash flow
information:
Cash paid during the
period for interest.... $ 19,381 $ 43,987 $ 46,755 $ 69,961 $ 32,835 $ 2,870
======== ========= ========= ========= ======== =========
Cash paid during the
period for income
taxes.................. $ 1,885 $ 9,842 $ 5,315 $ 19,993 $ 8,819 $ 3,106
======== ========= ========= ========= ======== =========
Noncash transactions (see
notes 2, 10 and 19)
</TABLE>

See accompanying notes to consolidated financial statements.

F-7
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) General Business

Samsonite Corporation and Subsidiaries (the "Company"), was formerly known
as Astrum International Corp. ("Astrum"), which was formerly known as E-II
Holdings, Inc. On July 14, 1995, Astrum merged with its wholly-owned
subsidiary, Samsonite Corporation, and changed its name to Samsonite
Corporation. The Company is engaged in the manufacture and sale of luggage and
related products throughout the world, primarily under the Samsonite, American
Tourister, and Lark brand names (see note 18). The principal customers of the
Company are department/specialty retail stores, mass merchants, catalog
showrooms, and warehouse clubs. The Company's retail sales consist primarily
of American Tourister products through company owned stores.

Previously, Astrum was a holding company with subsidiaries involved in the
water treatment business and apparel manufacturing business in addition to the
luggage business. As more fully explained in note 2, the Company has
discontinued the water treatment and apparel manufacturing business segments.

(b) Basis of Presentation

On May 25, 1993, the United States Bankruptcy Court for the Southern
District of New York confirmed the Amended Plan of Reorganization (the "Plan")
for Astrum. Pursuant to the terms of the Plan, which became effective on June
8, 1993 (the "Effective Date"), Astrum completed a comprehensive financial
reorganization which reduced debt and annual interest expense (the
"Restructuring").

The Restructuring has been accounted for pursuant to the American Institute
of Certified Public Accountants Statement of Position 90-7, entitled
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code"
("SOP 90-7"). SOP 90-7 requires that assets and liabilities be adjusted to
their fair values ("fresh-start" values) and that a new reporting entity be
created. On June 30, 1993, for accounting purposes, the Plan was consummated
and SOP 90-7 was adopted. Activity prior to June 30, 1993 is reported as
"Predecessor Company" activity. The consolidated financial statements of the
"Predecessor Company" include the recording of the adjustments to fresh-start
values and the adoption of the Plan. The consolidated financial statements for
periods subsequent to June 30, 1993 are those of the "Reorganized Company",
and include the ongoing impact of the fresh-start reporting. As a result, the
consolidated financial statements of the "Predecessor Company" are not
comparable to the consolidated financial statements of the "Reorganized
Company".

The consolidated financial statements as of and for the nine months ended
October 31, 1996 and 1995 and related notes thereto have not been audited.
These consolidated financial statements reflect all adjustments, which are
normal and recurring in nature, and which in the opinion of management are
necessary to a fair statement of the financial position and results of
operations as of and for the nine-month periods ended October 31, 1996 and
1995.

The consolidated financial statements include the financial statements of
Samsonite Corporation and its subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation. The Company's
primary foreign subsidiaries have December 31 year ends.

Minority interests consist of other stockholders' ownership interests in
subsidiaries of the Company.

(d) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and

F-8
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

(e) Cash Equivalents

The Company considers all highly liquid debt instruments with original
maturities of three months or less to be cash equivalents.

(f) Inventories

The Company values inventories at the lower of cost on the first-in, first-
out ("FIFO") method or market.

(g) Investments in Affiliates

The investment at January 31, 1995 represented the Company's 49% ownership
interest in a group of Mexican companies. Effective February 1, 1995, the
Company acquired the remaining 51% interest in certain of the companies in the
luggage business in exchange for its 49% interest in the other companies.
Prior to the acquisition, the investment was accounted for using the equity
method.

At October 31, 1996, investments in affiliates (unaudited) primarily
represents the Company's investment in Chia Tai Samsonite (H.K.) Ltd., a 50%
owned joint venture to manufacture and distribute luggage in China.

(h) Property, Plant and Equipment

Property, plant and equipment acquired subsequent to the adoption of fresh-
start reporting are stated at cost. In connection with the adoption of fresh-
start reporting at June 30, 1993, the Company was required to adjust property,
plant and equipment to fair value. Assets under capital leases are stated at
the present value of the minimum lease payments. Improvements which extend the
life of an asset are capitalized. Maintenance and repair costs are expensed.

Assets held for sale are assets not used in manufacturing or distribution
operations which management believes will be sold within one year. The assets
are recorded at the lower of cost or net realizable value.

Depreciation and amortization are provided on the straight-line method over
the estimated useful lives of the assets as follows:

<TABLE>
<S> <C>
Buildings..................................................... 20 to 65 years
Machinery, equipment and other................................ 2 to 20 years
</TABLE>

(i) Intangible Assets

As a result of adopting fresh-start reporting, the Company recorded
reorganization value in excess of identifiable assets. Tradenames, licenses,
patents and other intangibles were recorded at fair value based upon
independent appraisals. These assets are amortized on a straight line basis
over their estimated useful lives as follows:

<TABLE>
<S> <C>
Reorganization value in excess of identifiable assets............. 3 years
Tradenames........................................................ 5-40 years
Licenses, patents and other....................................... 1-23 years
</TABLE>

F-9
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The Company accounts for "Reorganization Value in Excess of Identifiable
Assets" and all other intangible assets at the lower of amortized cost or fair
value. On an ongoing basis, the Company reviews the valuation and amortization
of intangible assets, taking into consideration any events or circumstances
which may have diminished fair value, including comparing intangible asset
carrying value to projected discounted future operating results using a
discount rate reflecting the Company's average cost of capital.

(j) Debt Issuance Costs

Costs incurred in connection with the issuance of new debt instruments are
deferred and included in other assets. Such costs are amortized over the term
of the related debt obligation.

(k) Reorganization Items

Reorganization items consist of adjustments of assets and liabilities to
their fair value in accordance with SOP 90-7 and income, expenses and other
costs related to the Company's Restructuring.

(l) Per Share Data

Net loss from continuing operations per share and net loss per share are
computed based on a weighted average number of shares of common stock
outstanding during the period. The weighted average number of common shares
outstanding was 15,953,019 (unaudited), 15,776,294 (unaudited), and 15,806,675
for the nine months ended October 31, 1996 and 1995 and for the year ended
January 31, 1996, respectively, and 15,463,918 for the year ended January 31,
1995 and the seven months ended January 31, 1994. Common stock equivalents are
not included in the computation as they are antidilutive. Per share data for
the five months ended June 30, 1993 is not presented because the Predecessor
Company had a single stockholder.

(m) Income Taxes

The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes ("SFAS 109"). SFAS 109 requires recognition of deferred tax assets and
liabilities for loss carryforwards and the estimated future tax consequences
attributable to temporary differences between the financial statement carrying
amount of existing assets and liabilities and their respective tax bases.
Measurement of deferred tax assets and liabilities is based upon the
provisions of enacted tax laws and the effects of future changes in tax laws
or rates are not anticipated.

Deferred tax assets are reduced by a valuation allowance for the portion of
such assets for which it is more likely than not the amount will not be
realized. Deferred tax assets and liabilities are classified as current or
noncurrent based on the classification of the related asset or liability for
financial reporting or the expected date of reversal for the temporary
difference.

(n) Insurance

The Company maintains self-insurance programs for certain workers'
compensation and automobile liability risks up to $500,000 per individual
claim. The Company purchases excess workers' compensation and automobile
liability coverage for individual claims in excess of $500,000.

(o) Foreign Exchange Risk and Financial Instruments

The accounts of the Company's foreign subsidiaries and affiliates are
measured using the local currency as the functional currency. For those
operations, assets and liabilities are translated into U.S. dollars at period-
end exchange rates. Income and expense accounts are translated at average
monthly exchange rates. Net exchange

F-10
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

gains or losses resulting from such translation are excluded from results of
operations and accumulated in a separate component of stockholders' equity.
Gains and losses from foreign currency transactions are included in other
income (expense).

When appropriate, the Company will enter into foreign exchange contracts in
order to reduce its economic exposure on certain foreign operations and/or
royalty agreements through the use of forward delivery commitments. Generally,
open forward delivery commitments are marked to market at the end of each
accounting period and corresponding gains and losses are recognized in other
income (expense).

With respect to trade receivables, concentration of credit risk is limited
due to the diversity in the Company's customer base and geographic areas
covered by the Company's operations. Any probable bad debt loss has been
provided for in the allowance for doubtful accounts.

(p) Accounting for Long-lived Assets

In March 1995, the Financial Accounting Standards Board issued Statement No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of ("SFAS 121") , effective for fiscal years beginning
after December 15, 1995, which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. SFAS 121 also addresses the accounting
for long-lived assets that are expected to be disposed of. The Company adopted
SFAS 121 in the first quarter of fiscal 1997; however, no impairment losses
were recorded as a result (unaudited).

(q) Royalty Revenues

The Company licenses its brand names to certain unrelated third parties as
well as certain foreign subsidiaries and joint ventures. Net sales include
royalties earned of $16,814,000 (unaudited--see note 19c), $13,233,000
(unaudited), $17,056,000, $18,351,000, and $12,833,000 for the nine months
ended October 31, 1996 and 1995, and the year ended January 31, 1996 and 1995
and the seven months ended January 31, 1994, respectively, and $6,425,000 for
the five months ended June 30, 1993.

(r) Reclassifications

Certain reclassifications were made to the consolidated financial statements
for prior periods to conform to the January 31, 1996 presentation.

(2) DISCONTINUED OPERATIONS

During fiscal 1995, the Company's Board of Directors adopted a plan to (i)
separate the water treatment business from its other operations through a
spinoff in the form of a one-for-one stock dividend to the Company's
stockholders and (ii) to sell or otherwise discontinue its apparel
manufacturing and pet food businesses. The results of these operations through
January 31, 1995 are presented in the accompanying consolidated financial
statements as discontinued operations. The loss on discontinuance for fiscal
1995 includes the sales of certain assets from discontinued operations, the
adjustment of certain assets and liabilities to their estimated net realizable
value, and the estimate of certain operating results through the date of
disposal. The loss on discontinuance during fiscal 1996 includes an adjustment
to reduce previously accrued losses on disposal of $2.6 million, net of income
taxes of $1.1 million, and a provision for federal income taxes on the
distribution of the common stock of the water treatment business to certain
foreign stockholders of $3.8 million.

F-11
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The accompanying consolidated financial statements present the results of
the water treatment business, the apparel manufacturing business and the pet
food business as discontinued operations. The operating results of the
discontinued operations are summarized below:

<TABLE>
<CAPTION>
YEAR SEVEN MONTHS FIVE MONTHS
ENDED ENDED ENDED
JANUARY 31, 1995 JANUARY 31, 1994 JUNE 30, 1993
---------------- ---------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Water treatment:
Revenues................. $280,041 $154,325 $109,748
Income (loss) before
income taxes............ (28,288) (14,755) 10,392
Apparel manufacturing:
Revenues................. $225,708 $108,629 $104,575
Income (loss) before
income taxes............ (2,207) (9,442) 9,782
Pet food:
Revenues................. $ 4,741 $ 7,046 $ 4,193
Loss before income
taxes................... (999) (819) (27)
</TABLE>

During fiscal 1996, the Company distributed its stock in the water treatment
business to the Company's stockholders and charged the amount of the net
assets of the water treatment business of $61.1 million at the date of
distribution to additional paid-in capital. As part of the spinoff, the water
treatment business repaid $112 million of intercompany indebtedness.
Additionally, the Company closed its apparel manufacturing operations and sold
all related inventories and equipment to unrelated third parties.

Also included in discontinued operations are royalties earned during the
five months ended June 30, 1993 which resulted from royalty interests retained
by the Company in certain operations sold and discontinued.

(3) PURCHASE OF AMERICAN TOURISTER, INC.

On August 30, 1993, Samsonite acquired American Tourister, Inc. ("American
Tourister") for an adjusted cash purchase price of $63,834,000. American
Tourister manufactures, designs and distributes lines of moderately priced
luggage products, business cases, and travel accessories primarily in the
United States.

Pro forma results of operations as if American Tourister had been acquired
as of February 1, 1993 are as follows:

<TABLE>
<CAPTION>
REORGANIZED COMPANY PREDECESSOR COMPANY
------------------- -------------------
SEVEN MONTHS FIVE MONTHS
ENDED ENDED
JANUARY 31, 1994 JUNE 30, 1993
------------------- -------------------
(IN THOUSANDS)
<S> <C> <C>
Net sales............................ $353,897 $249,984
======== ========
Operating income (loss).............. $ (2,463) $ 15,203
======== ========
Net income (loss).................... $(51,194) $925,642
======== ========
</TABLE>

Operating income (loss) and net income (loss) for the seven months ended
January 31, 1994 is not comparable to the five months ended June 30, 1993 as a
result of the adjustments required by SOP 90-7.

F-12
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(4) INVENTORIES

Inventories consisted of the following:

<TABLE>
<CAPTION>
JANUARY 31,
OCTOBER 31, ------------------
1996 1996 1995
----------- -------- --------
(UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C>
Raw materials and supplies................. $ 50,911 $ 35,827 $ 34,312
Work in process............................ 10,848 10,959 10,190
Finished goods............................. 77,379 68,950 61,507
-------- -------- --------
$139,138 $115,736 $106,009
======== ======== ========

(5) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

<CAPTION>
JANUARY 31,
OCTOBER 31, ------------------
1996 1996 1995
----------- -------- --------
(UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C>
Land....................................... $ 13,429 $ 14,172 $ 14,471
Buildings.................................. 62,852 62,281 63,281
Machinery, equipment and other............. 115,900 106,511 83,050
-------- -------- --------
192,181 182,964 160,802
Less accumulated depreciation and
amortization.............................. (54,011) (42,052) (23,116)
-------- -------- --------
$138,170 $140,912 $137,686
======== ======== ========
</TABLE>

Property, plant and equipment includes property and equipment under capital
leases as follows:

<TABLE>
<CAPTION>
JANUARY 31,
OCTOBER 31, ------------------
1996 1996 1995
----------- -------- --------
(UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C>
Buildings.................................. $ 4,718 $ 4,759 $ 3,267
Machinery, equipment and other............. 3,856 2,179 1,312
Less accumulated amortization.............. (2,666) (1,625) (886)
-------- -------- --------
$ 5,908 $ 5,313 $ 3,693
======== ======== ========

(6) INTANGIBLE ASSETS

The following is a summary of intangible assets, net of accumulated
amortization:

<CAPTION>
JANUARY 31,
OCTOBER 31, ------------------
1996 1996 1995
----------- -------- --------
(UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C>
Reorganization value in excess of
identifiable assets....................... $ -- $ 22,947 $ 78,019
Tradenames................................. 116,766 119,549 122,742
Licenses, patents and other................ 13,108 16,996 22,221
-------- -------- --------
$129,874 $159,492 $222,982
======== ======== ========
</TABLE>

F-13
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(7) SHORT-TERM DEBT

As of January 31, 1996 and 1995, the Company had $34,881,000 and $36,369,000
of debt outstanding under foreign lines of credit. At January 31, 1996,
$11,394,000 of such borrowings are classified as long-term debt because they
are secured by letters of credit issued under the Company's Senior Credit
Facility (see note 8). If such borrowings were not renewed, the Company would
refinance such amounts under its Senior Credit Facility on a long-term basis.
During the year ended January 31, 1996, interest on short-term debt ranged
from 4.3% to 10.5% and the average effective interest rate was 7.7% at January
31, 1996. Interest rates on certain foreign borrowings are not directly
comparable to U.S. interest rates. Unused amounts of the foreign lines of
credit and other foreign borrowing arrangements totaled $28,316,000 as of
January 31, 1996, and are generally restricted for working capital purposes.

(8) LONG-TERM OBLIGATIONS

Long-term obligations represent long-term debt and capital lease obligations
as follows:

<TABLE>
<CAPTION>
JANUARY 31,
OCTOBER 31, -------------------
1996 1996 1995
----------- -------- ---------
(UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C>
Series B Senior Subordinated Notes(a)..... $190,000 $190,000 $ --
Senior Secured Notes(a)................... -- -- 375,217
Senior Credit Facility(b)................. 57,500 58,000 --
Short-term obligations expected to be
refinanced (note 7)...................... 5,195 11,394 --
Other(c).................................. 34,925 46,900 33,889
Capital lease obligations(d).............. 5,022 4,665 3,380
-------- -------- ---------
Total................................... 292,642 310,959 412,486
Current installments...................... (19,475) (16,306) (109,745)
Unamortized premium and debt issue costs.. -- -- 4,689
-------- -------- ---------
$273,167 $294,653 $ 307,430
======== ======== =========
</TABLE>

(a) Series B Senior Subordinated Notes and Senior Secured Notes

On July 14, 1995, the Company redeemed the 11 1/2% Senior Secured Notes
outstanding at January 31, 1995, in the principal amount of $375,217,000. The
redemption price included a contractual premium of $18,000,000 which, net of
unamortized premium $4,369,000 and income tax benefit of $5,589,000, is
included in the consolidated statement of operations for the year ended
January 31, 1996 as an extraordinary loss on extinguishment of debt. The
Senior Secured Notes were redeemed with the proceeds from the issuance of new
11 1/8% Series A Senior Subordinated Notes, the repayment of $112 million of
intercompany debt from discontinued operations (see note 2), and borrowings
under the Company's Senior Credit Facility. The 11 1/8% Series A Senior
Subordinated Notes were later exchanged for 11 1/8% Series B Senior
Subordinated Notes (the "Series B Notes") having substantially the same terms
and conditions.

Interest on the Series B Notes is payable semiannually with principal due
July 15, 2005. The Series B Notes may be redeemed after July 15, 2000 with the
payment of certain redemption premiums; however, up to one-third of the
outstanding Series B Notes may be redeemed (at a premium) before July 15,
1998, from the proceeds of the first two public equity offerings, if any, the
Company completes. The terms of the Series B Notes include financial covenants
to maintain certain financial ratios similar to those contained in the
Company's Senior Credit

F-14
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Facility (see (b) below). Additionally, covenants restrict payment of any
dividends, amounts of additional debt issuances, asset sales, and amounts of
investments in emerging market subsidiaries. At October 31, 1996 (unaudited)
and January 31, 1996, the Company is in compliance with the terms of such
covenants.

(b) Senior Credit Facility

On July 14, 1995, the Company repaid amounts outstanding under certain of
its previous banking arrangements and entered into a new Senior Credit
Facility maturing July 14, 2000. The new agreement provides for a $50 million
term loan and a $175 million revolving credit facility. At January 31, 1996,
the outstanding term loan, revolving credit borrowings, and letters of credit
issued under the line were $50 million, $8 million, and $59.4 million,
respectively. Available borrowings were $107.6 million at January 31, 1996.
Included in letters of credit outstanding is a $54.5 million standby letter of
credit issued to secure certain short-term and long-term debt of foreign
subsidiaries.

Borrowings under the agreement accrue interest at rates adjusted quarterly
depending on the Company's financial performance as measured by certain
financial ratios measured each quarter. At January 31, 1996, loans outstanding
under the Senior Credit Facility bear interest at approximately 8%. A
commitment fee on the unused revolving credit is also payable quarterly at a
rate adjusted quarterly depending on the Company's financial performance.

The term loan portion of the facility is repayable over an approximate four
year period beginning October 31, 1996. Payments of $2,500,000 per quarter are
due for the period October 31, 1996 through July 31, 1998 and quarterly
payments of $3,750,000 are due from October 31, 1998 through April 30, 2000
with the remaining unpaid balance due on July 14, 2000. The amount available
under the revolving credit facility of $175 million is reduced quarterly in
varying amounts to $131.25 million at the maturity date of the facility,
July 14, 2000.

The facility is secured by substantially all the Company's U.S. assets, the
capital stock of its principal domestic subsidiaries, and 66% of the stock of
principal foreign subsidiaries.

The agreement contains financial covenants which require the Company to
maintain certain debt, working capital and interest coverage ratios and
minimum amounts of earnings exclusive of interest, taxes, and noncash charges.
The agreement also contains covenants limiting the amount of capital
expenditures, investments in certain subsidiaries, and dividends, among other
restrictions. Under the agreement, the Company has no amount available for the
payment of dividends at October 31, 1996 or January 31, 1996. The Company is
in compliance with the terms of such covenants at October 31, 1996 (unaudited)
and January 31, 1996.

As of January 31, 1996, other obligations consisted of various notes payable
to banks by foreign subsidiaries aggregating $40.9 million and a $6 million
secured financing arrangement with a European leasing corporation. The
obligations bear interest at varying rates and mature through 2005.

F-15
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(d) Leases

Future minimum payments under noncancelable leases at January 31, 1996 were
as follows:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
(IN THOUSANDS)
<S> <C> <C>
Year ending January 31:
1997................................................... $ 1,261 $ 8,598
1998................................................... 1,169 7,175
1999................................................... 1,124 5,814
2000................................................... 1,059 3,926
2001................................................... 351 2,248
Thereafter............................................. 1,876 9,677
------- -------
Total minimum lease payments......................... 6,840 $37,438
=======
Less amount representing interest........................ 2,175
-------
Present value of net minimum capital lease payments.. 4,665
Current installments of minimum capital lease payments... 744
-------
Long-term obligation under capital leases, excluding
current installments.................................... $ 3,921
=======
</TABLE>

Rental expense under cancelable and noncancelable operating leases
pertaining to continuing operations consisted of the following:

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
-------------------------- -----------
SEVEN FIVE
YEAR ENDED MONTHS MONTHS
JANUARY 31, ENDED ENDED
-------------- JANUARY 31, JUNE 30,
1996 1995 1994 1993
------- ------ ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Minimum rentals....................... $ 8,650 $7,580 $3,064 $1,061
Contingent rentals.................... 523 434 231 --
------- ------ ------ ------
$ 9,173 $8,014 $3,295 $1,061
======= ====== ====== ======
</TABLE>

Aggregate maturities of long-term obligations at January 31, 1996 were as
follows (in thousands):

<TABLE>
<S> <C>
Year ending January 31:
1997............................................................. $ 15,562
1998............................................................. 19,762
1999............................................................. 22,054
2000............................................................. 41,224
2001............................................................. 14,623
Thereafter....................................................... 193,069
--------
306,294
Obligations under capital leases................................. 4,665
--------
Total.......................................................... $310,959
========
</TABLE>

(9) THE REORGANIZATION AND EMERGENCE FROM CHAPTER 11

The reorganization and emergence from Chapter 11 enabled Astrum to continue
as a going concern. The Plan provided for the resolution of all debts and
claims against Astrum as well as the resolution of all legal

F-16
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

disputes, in exchange for cash, new indebtedness and new common equity
securities. Distribution was made to the holders of certain debt instruments
in full satisfaction of amounts owed to them of $342,300,000 in cash,
$500,000,000 in 11.5% Senior Secured Notes, 97% of the new common stock of
Astrum and a portion of the beneficial interests in a trust (the "Settlement
Trust"). Three percent (3%) of the new common stock was issued, subject to
certain restrictions, to the Chief Executive Officer and the Chairman of the
Board of Astrum, as part of an incentive compensation plan (see note 10). The
Plan also provided for (i) the establishment of the Settlement Trust (see note
14), (ii) the discharge of all debt and claims; (iii) the cancellation of pre-
petition ownership interests; (iv) the cancellation of all tax sharing
agreements; (v) the assumption or rejection of executory contracts and
unexpired leases to which Astrum was a party; and (vi) the appointment of a
board of directors for Astrum.

In adopting fresh-start reporting, and as required by the reorganization
proceedings, Astrum, with the assistance of its financial advisors was
required to determine its reorganization value, which represents the fair
value of the entity (approximately $910 million) before considering
liabilities and which was intended to approximate the amount a willing buyer
would pay for the assets of Astrum immediately after its emergence from
Chapter 11. The reorganization value was determined by consideration of
several factors including: the discounted residual value of Astrum, market
share, position and competition of each operating company, projected sales,
profitability, growth, working capital requirements and general economic
considerations. The total reorganization value was calculated using projected
after tax cash flows of the operating companies before debt service
requirements for a five-year period, plus an estimated terminal value of
Astrum calculated using multiples for comparable companies ranging from five
(5) to seven (7) times projected earnings before interest, income taxes,
depreciation and amortization, each discounted back to its present value using
a discount rate of 13% (representing Astrum's estimated weighted cost of
capital).

In allocating the reorganization value, Astrum's assets were recorded at
their assumed fair value with the excess of the reorganization value over the
value of identifiable assets reported as reorganization value in excess of
amounts allocable to identifiable assets. The estimated fair value of the
assets was determined utilizing independent valuations of (1) real estate and
machinery and equipment; (2) the tradenames of the companies; and (3)
licenses, patents and various other intangible assets. All other identifiable
assets were recorded at fair value which approximated cost or carrying value.
The new Senior Secured Notes were recorded at stated value plus a premium,
which approximated fair market value. All other liabilities were recorded at
fair value which approximated carrying value. As part of the reorganization
proceedings, Astrum had earned interest that it would not normally have earned
and incurred reorganization expenses through the Effective Date.

In accordance with SOP 90-7, the interest earned and other reorganization
items were reported separately in the consolidated statement of operations as
"Reorganization Items" and are summarized as follows:

<TABLE>
<CAPTION>
FIVE MONTHS ENDED
JUNE 30, 1993
-----------------
(IN THOUSANDS)
<S> <C>
Adjustments to fair value (a)................................. $565,334
Interest income............................................... 4,405
PBGC claim (b)................................................ (37,700)
McCrory settlement (c)........................................ (29,828)
Professional fees............................................. (19,896)
Claim for interest on old notes (d)........................... (16,400)
Interest expense from June 8 to June 30, 1993 (e)............. (3,468)
--------
Total....................................................... $462,447
========
</TABLE>

F-17
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

- --------
(a) Adjustments to fair value reflect the net change to assets and liabilities
at fair value in accordance with the provisions of SOP 90-7 (see note 1b).
(b) PBGC claim (see notes 14 and 19).
(c) McCrory settlement (see note 14) includes (in thousands):

<TABLE>
<S> <C>
Settlement trust (cash)............................................ $ 4,850
Settlement trust note.............................................. 14,000
Schenley Plan...................................................... 4,000
Security interest in Clinton Warehouse............................. 6,978
-------
Total............................................................ $29,828
=======
</TABLE>

(d) Claim for interest (see notes 14 and 19).
(e) Constitutes interest of $3,514,000 from June 8, 1993 (the effective date
of the Plan) to June 30, 1993 (the effective date for accounting purposes)
and amortization of premium for the same period of $46,000.

The reorganization and emergence from Chapter 11 and the adoption of the
Plan resulted in the forgiveness of certain liabilities subject to compromise
in consideration for cash, new Senior Secured Notes, and 97% of the new common
stock of Astrum. This resulted in a gain of $387,212,000 which has been
recorded as an extraordinary item in the consolidated statement of operations
for the five months ended June 30, 1993.

(10) INCENTIVE PLAN AND EMPLOYEE STOCK OPTIONS

1993 Incentive Plan and Employment Agreement

The Company adopted the 1993 Incentive Plan as part of the Restructuring
pursuant to which stock options may be granted and restricted stock awards may
be made. The terms, amounts and restrictions of grants or awards under the
incentive plan are determined by the compensation committee of the Board of
Directors. A total of 1,304,348 common shares are authorized to be issued
pursuant to the incentive plan.

On June 8, 1993, 463,918 restricted shares were awarded to the Company's
Chief Executive Officer ("CEO") under the incentive plan, subject to certain
forfeiture restrictions which lapsed over a two year period from the date of
the award.

On April 13, 1995, pursuant to a new employment agreement with the CEO,
certain options previously outstanding under the plan were cancelled, and
options to purchase 653,668 shares (granted June 8, 1993 at fair market value)
became fully vested and exercisable under the plan at an exercise price of
$11.87, as adjusted by the terms of the option agreement for the spinoff of
the water treatment business. Under the employment agreement, the CEO was
granted options on a total of 1,500,000 additional shares at exercise prices
ranging from $24.85 to $32.85, as adjusted by the terms of the option
agreement for the spinoff of the water treatment business. These options have
a ten year term and become exercisable on an accelerated basis upon the
Company attaining certain performance goals, but no later than February 1,
2005. Also under the employment agreement, the Company sold to the CEO 425,532
shares of common stock in exchange for a $10 million promissory note, which is
shown as a reduction of stockholders' equity in the accompanying fiscal 1996
consolidated financial statements. The note bore interest at 8 1/8% per annum.
The Company agreed to pay the CEO additional compensation equal to the
interest due on the note. The note was due on April 13, 2000; however, payment
can be accelerated upon the occurrence of certain events including the sale of
the shares purchased in exchange for the note. The note was paid on October
11, 1996 (unaudited).

F-18
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

At January 31, 1996, options for 186,762 shares were available for granting
under the 1993 Incentive Plan.

A summary of options outstanding at January 31, 1996, under the 1993
Incentive Plan and the employment agreement with the CEO, follows:

<TABLE>
<CAPTION>
SHARES UNDER OPTION EXERCISABLE
OPTION PRICE OPTIONS
------------ ------ -----------
<S> <C> <C> <C>
1993 Incentive Plan.......................... 653,668 $11.87 653,668
Employment Agreement: 500,000 24.85 --
1,000,000 32.85 --
</TABLE>

1995 Stock Option and Incentive Award Plan

In fiscal 1996, the Company adopted upon stockholder approval the 1995 Stock
Option and Award Plan ("the 1995 plan"). The 1995 plan reserves 550,000 shares
for the issuance of options as determined by the compensation committee of the
Board of Directors. The plan provides for the issuance of a variety of awards,
including tax qualified incentive stock options, nonqualified stock options,
stock appreciation rights, restricted stock awards or other forms of awards
consistent with the purposes of the plan. Incentive stock options must be
issued at exercise prices no less than the fair market value of the common
stock at the date of the grant. Nonqualified options may be granted at
exercise prices at or below the market value, but not at less than 50% of the
market value of the common stock at the date of the grant. Options granted
under the plan will vest over a period of not more than ten years as
determined by the compensation committee. At January 31, 1996, no options were
outstanding under the 1995 plan.

On February 20, 1996, options for 350,098 shares were granted under the plan
at option prices from $10.88 to $12.88 per share, which prices were at or
above market value. The options have a six-year term and become exercisable
over a four-year period from the date of the grant.

Other Options

In August 1994, options to purchase 17,500 shares were granted to an former
officer under an individual stock option plan and agreement. The exercise
price is the fair market value at the date of grant of $11.14, as adjusted for
the spinoff of the water treatment business in fiscal 1996. The options are
fully vested at January 31, 1996.

See additional information provided in note 19.

Impact of Recently Issued Accounting Standard

In October 1995, the FASB issued Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), which provides
an alternative to APB Opinion No. 25, Accounting for Stock Issued to
Employees, in accounting for stock-based compensation issued to employees. The
Statement allows for a fair value based method of accounting for employee
stock options and similar equity instruments. However, for companies that
continue to account for stock-based compensation arrangements under Opinion
No. 25, SFAS 123 requires disclosure of the pro forma effect on net income and
earnings per share of its fair value based accounting for those arrangements.
These disclosure requirements are effective for fiscal years beginning after
December 15, 1995, or upon initial adoption of SFAS 123, if earlier. The
Company has not adopted the recognition and measurement provisions of SFAS 123
and will make the required disclosures in the consolidated financial
statements for the year ending January 31, 1997.

F-19
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(11) INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, which requires recognition of deferred
tax assets and liabilities for the estimated future tax consequences
attributable to differences between the financial statement carrying amount of
existing assets and liabilities and their respective tax bases. Income tax
expense (benefit) attributable to income (loss) from continuing operations
consists of:

<TABLE>
<CAPTION>
CURRENT DEFERRED TOTAL
------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C>
REORGANIZED COMPANY
Year ended January 31, 1996:
U.S. federal.................................. $ (426) $1,944 $ 1,518
Foreign....................................... 5,699 257 5,956
U.S. state and local.......................... 1,013 608 1,621
------ ------ -------
$6,286 $2,809 $ 9,095
====== ====== =======
Year ended January 31, 1995:
U.S. federal.................................. $1,245 $2,324 $ 3,569
Foreign....................................... 6,142 (368) 5,774
U.S. state and local.......................... 1,286 (10) 1,276
------ ------ -------
$8,673 $1,946 $10,619
====== ====== =======
Seven months ended January 31, 1994:
U.S. federal.................................. $ -- $2,355 $ 2,355
Foreign....................................... 3,110 (416) 2,694
U.S. state and local.......................... 868 880 1,748
------ ------ -------
$3,978 $2,819 $ 6,797
====== ====== =======
PREDECESSOR COMPANY
Five months ended June 30, 1993:
Foreign....................................... $1,887 $ (126) $ 1,761
U.S. state and local.......................... 552 -- 552
------ ------ -------
$2,439 $ (126) $ 2,313
====== ====== =======
</TABLE>

Income tax (expense) benefit attributable to income (loss) from continuing
operations differed from the amounts computed by applying the U.S. federal
income tax rate of 34 percent as a result of the following:

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
------------------------------- -----------
SEVEN FIVE
YEAR ENDED MONTHS MONTHS
JANUARY 31, ENDED ENDED
------------------ JANUARY 31, JUNE 30,
1996 1995 1994 1993
-------- -------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Computed "expected" tax benefit
(expense)..................... $ 13,829 $ 12,123 $ 6,145 $(160,341)
Increase in taxes resulting
from:
Tax rate differential on
foreign earnings............ (3,609) (3,034) (274) (1,825)
Amortization of intangibles.. (18,668) (18,668) (10,911) --
Reorganization items......... -- -- -- 157,232
State taxes.................. (1,070) (842) (1,154) (364)
Other, net................... 423 (198) (603) 2,985
-------- -------- -------- ---------
Income tax expense............. $ (9,095) $(10,619) $ (6,797) $ (2,313)
======== ======== ======== =========
</TABLE>

F-20
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The tax effects of temporary differences that give rise to significant
portions of the net deferred tax asset are presented below:

<TABLE>
<CAPTION>
JANUARY 31,
------------------
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Deferred tax assets:
Allowance for uncollectible accounts receivable and other
receivables............................................. $ 8,252 $ 7,335
Inventory costs capitalized for tax purposes............. 842 1,163
Other accruals and reserves accrued for financial
reporting purposes...................................... 46,623 59,872
Postretirement benefits accrued for financial reporting
purposes................................................ 6,508 6,150
Net operating loss carryforwards......................... 61,535 65,067
-------- --------
Total gross deferred tax assets........................ 123,760 139,587
Less:
Valuation allowance.................................... (44,311) (42,743)
-------- --------
Net deferred tax assets.............................. 79,449 96,844
-------- --------
Deferred tax liabilities:
Plant, equipment and intangibles, due to differences as a
result of fresh start................................... 53,799 58,234
Plant and equipment, due to differences in depreciation
methods................................................. 17,614 18,115
Other accruals and reserves.............................. 2,314 3,503
-------- --------
Total gross deferred tax liabilities................... 73,727 79,852
-------- --------
Net deferred tax asset............................... $ 5,722 $ 16,992
======== ========
</TABLE>

The components of the net current deferred income tax asset and net
noncurrent deferred income tax liability were as follows:

<TABLE>
<CAPTION>
JANUARY 31,
---------------
1996 1995
------- -------
(IN THOUSANDS)
<S> <C> <C>
Net current deferred income tax asset:
U.S. federal................................................. $32,142 $48,197
U.S. state and local......................................... 6,618 9,923
------- -------
38,760 58,120
------- -------
Net noncurrent deferred income tax liability:
U.S. federal................................................. 12,544 20,381
Foreign...................................................... 16,179 7,012
U.S. state and local......................................... 4,315 13,735
------- -------
33,038 41,128
------- -------
Net deferred income tax asset.............................. $ 5,722 $16,992
======= =======
</TABLE>

Management of the Company believes that it is more likely than not that the
results of future operations will generate sufficient taxable income to
realize the net deferred tax asset of $5,722,000 at January 31, 1996. If the
Company should recognize a tax benefit for pre-reorganization net operating
losses, for which a valuation allowance had been established, it would be
applied to reduce intangible assets until exhausted and then to increase
additional paid-in capital.

F-21
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

At January 31, 1996 and 1995, the Company has net operating loss
carryforwards of $171,000,000 and $186,000,000, respectively, for federal
income tax purposes, expiring through 2011. As a result of the reorganization,
the Company had a change in ownership as defined by Section 382 of the
Internal Revenue Code. Consequently, utilization of the net operating loss
carryforward is subject to an annual limitation of $17,200,000 per year. In
fiscal 1995, as a result of the sale of a portion of the apparel manufacturing
business, the Company recognized a "built-in gain" which allowed utilization
of net operating loss carryforwards in excess of the annual limitation. In
addition, certain of the net operating loss carryforwards are limited to
offsetting future taxable income of certain members of the consolidated group.

Deferred income taxes have been provided on undistributed earnings of
foreign subsidiaries to the extent that management plans to remit these
earnings in the future. Undistributed earnings of foreign subsidiaries and
affiliates that are permanently invested and for which no deferred taxes have
been provided amounted to approximately $69,200,000 and $71,600,000 as of
January 31, 1996 and 1995, respectively.

At January 31, 1996, the Company has a related party receivable of $7.9
million from the water treatment business for income taxes due under a tax
sharing agreement for tax liabilities while it was part of the Company's
consolidated group for federal income tax purposes.

(12) PENSION AND OTHER EMPLOYEE BENEFITS

Certain subsidiaries of the Company have pension plans which provide
retirement benefits for eligible employees, generally measured by length of
service, compensation and other factors.

Net pension cost of continuing operations included the following components:

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
------------------------------------ -----------
SEVEN FIVE
MONTHS MONTHS
YEAR ENDED JANUARY 31, ENDED ENDED
------------------------ JANUARY 31, JUNE 30,
1996 1995 1994 1993
----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Service cost................. $ 2,466 $ 2,697 $ 1,534 $ 930
Interest cost................ 6,521 6,041 3,432 2,387
Actual return (income) loss
on plan assets.............. (21,990) 314 (3,726) (3,745)
Net amortization and
deferral.................... 14,792 (7,424) (746) 1,013
----------- ---------- ------- -------
Net pension cost........... $ 1,789 $ 1,628 $ 494 $ 585
=========== ========== ======= =======
</TABLE>

F-22
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

The funded status of the plans at January 31, 1996 and 1995 was as follows:

<TABLE>
<CAPTION>
ASSETS EXCEED ACCUMULATED
ACCUMULATED BENEFITS
BENEFITS EXCEED ASSETS
---------------- -----------------
1996 1995 1996 1995
------- ------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Projected benefit obligation for
service rendered to date............. $63,481 $56,874 $ 29,641 $25,748
Plan assets at fair value............. 78,715 63,459 21,045 17,479
------- ------- -------- -------
Plan assets in excess (deficiency) of
projected benefit obligation......... 15,234 6,585 (8,596) (8,269)
Unrecognized prior service cost....... (88) (96) 315 --
Unrecognized net (gain) loss.......... (8,895) 313 (2,069) (940)
------- ------- -------- -------
Prepaid (accrued) pension cost
included in other assets
(liabilities)...................... $ 6,251 $ 6,802 $(10,350) $(9,209)
======= ======= ======== =======
Accumulated benefit obligation:
Vested.............................. $53,376 $51,669 $ 28,501 $27,927
======= ======= ======== =======
Nonvested........................... $ 214 $ 259 $ 163 $ 158
======= ======= ======== =======
</TABLE>

Net periodic pension cost during the year ended January 31, 1996 and 1995,
the seven months ended January 31, 1994, and five months ended June 30, 1993
assumed an expected long-term rate of return on plan assets of 7.5% to 8.5%
for domestic plans and 7.5% to 14% for foreign plans. The valuations of the
projected benefit obligation assumed weighted-average discount rates of 7.0%
to 7.25% for domestic plans and 7.5% to 12% for foreign plans at January 31,
1996 and 8% for domestic plans and 7.5% to 12% for foreign plans at January
31, 1995. The rate of increase in future compensation levels ranged from 4.25%
to 5% for domestic plans and 5.5% to 10% for foreign plans at January 31, 1996
and 1995.

Plan assets are primarily invested in cash equivalents, equity securities
and fixed income instruments. The plans do not have significant liabilities
other than benefit obligations. The Company's funding policy is to contribute
amounts equal to the minimum funding requirements of ERISA.

The Company sponsors defined contribution plans, qualified under Sections
401(a) and 401(k) of the Internal Revenue Code, which are offered to certain
groups of employees of substantially all U.S. operations. Expense related to
continuing operations for these plans was $1,052,000 during the year ended
January 31, 1996, $1,088,000 during the year ended January 31, 1995, $331,000
for the seven months ended January 31, 1994, and $244,000 for the five months
ended June 30, 1993.

The Company provides postretirement health care benefits primarily for
certain groups of employees of substantially all U.S. operations. Qualifying
employees become eligible for these benefits upon reaching normal or early
retirement age, and if they have accumulated the specified number of years of
service. The Company recognizes the cost of providing postretirement benefits
over the employee's service period.

F-23
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Postretirement benefit costs were as follows:

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
--------------------------- -----------
SEVEN FIVE
YEAR ENDED MONTHS MONTHS
JANUARY 31, ENDED ENDED
-------------- JANUARY 31, JUNE 30,
1996 1995 1994 1993
------ ------ ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Service cost--benefits earned
during period..................... $ 699 $ 665 $389 $ 653
Interest cost on projected benefit
obligation........................ 907 935 604 998
Other.............................. (169) (95) (1) --
------ ------ ---- ------
Total postretirement benefit
costs........................... $1,437 $1,505 $992 $1,651
====== ====== ==== ======
</TABLE>

The health care cost trend rates used to measure the expected cost in the
years ended January 31, 1996 and 1995, the seven months ended January 31,
1994, and the five months ended June 30, 1993 are between 10.0% and 15%,
graded down to an ultimate trend rate of between 5.0% and 5.5% to be achieved
over the next 10 years. The effect of a one-percentage-point increase in the
health care cost trend rate for future periods would increase the annual
postretirement benefit cost by $204,000. The accumulated postretirement
benefit obligation would increase by $835,000.

The weighted average discount rate used in determining the actuarial present
value of the projected benefit obligation was 7.25% at January 31, 1996 and
7.5% at January 31, 1995.

The funded status of obligations of the plans were as follows:

<TABLE>
<CAPTION>
JANUARY 31,
------------------
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Plan assets at fair value.................................. $ -- $ --
Accumulated postretirement benefit obligation.............. (9,697) (13,096)
Unrecognized cumulative net gain........................... (6,494) (2,097)
-------- --------
Postretirement benefit liability recognized.............. $(16,191) $(15,193)
======== ========
</TABLE>

(13) DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments for which it is practicable to estimate
that value:

Cash and Cash Equivalents, Trade Receivables, Trade Accounts Payable, Short-
term Debt, and Accrued Expenses

The carrying amount approximates fair value because of the short maturity or
duration of these instruments.

Series B Senior Subordinated Notes

There is no established public trading market for the Company's Series B
Senior Subordinated Notes. The Company estimates that the fair value of the
Series B Senior Subordinated Notes at January 31, 1996 approximates
$190,000,000 based on recent interdealer transactions which were priced at
par.

F-24
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Senior Credit Facility and Other Long-Term Obligations

The carrying value approximates the fair value of these instruments, which
primarily have floating interest rates that are fixed for periods not
exceeding six months.

Foreign Currency Forward Delivery Contracts

The fair value of foreign currency forward delivery contracts (see note 1o)
is estimated by reference to market quotations received from banks. At January
31, 1996 and 1995, the contract value of foreign currency forward delivery
agreements outstanding was $32,245,000 and $14,243,000, respectively. The
settlement value of these instruments was $31,768,000 and $14,222,000 at
January 31, 1996 and 1995, respectively.

Limitations

Fair value estimates are made at a specific point in time, based on relevant
market information and information about the financial instrument. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and therefore cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.

(14) LITIGATION, COMMITMENTS AND CONTINGENCIES

Obligations to Settlement Trust

In June 1993, as a part of the consummation of Astrum's Plan of
Reorganization, a trust (the "Trust") was established for the benefit of the
holders of certain classes of pre-bankruptcy claims against Astrum (the "Trust
Beneficiaries"). In connection with the creation of the Trust, Astrum
contributed certain assets (the "Trust Property") to the Trust including (i)
certain assets and agreements representing legal claims against Meshulam
Riklis a previous owner of Astrum, and certain companies and persons
associated with him (collectively, the "Riklis Entities"), (ii) certain claims
and causes of action held by Astrum against the Riklis Entities, and (iii)
certain portions of Astrum's interest in a compromise and settlement agreement
(the "McCrory Settlement Agreement") with McCrory Corporation, a company that
was formerly controlled by Mr. Riklis and that is a debtor in its own
bankruptcy case ("McCrory"). Astrum also assigned to the Trust, and the Trust
assumed, all the claims and causes of action held by the Riklis Entities
against Astrum. The stated purposes of the Trust are (i) to resolve, through
litigation, settlement or otherwise, the claims of the Trust against the
Riklis Entities and the claims of the Riklis Entities against the Trust, (ii)
to collect the Trust Property and reduce it to cash, (iii) to determine and
satisfy all the liabilities created by the Trust and (iv) to distribute to the
Trust Beneficiaries any balance remaining after the payment of liabilities.

The creation of the Trust permitted Astrum to emerge from bankruptcy without
first resolving the various claims between Astrum and the Riklis Entities, and
it relieved Astrum of liability in respect to the claims of the Riklis
Entities.

The terms of the Trust require Astrum to make loans to the Trust, in the
amount of up to $37 million in the aggregate, that will provide funds for the
operation of the Trust and to pay resolved claims and to make certain
distributions to holders of claims against the Trust. As of January 31, 1996,
Astrum had made loans to the Trust in the aggregate amount of $4.8 million,
all of which remain outstanding. Under the terms of the Trust, the Trust may
not repay the $4.8 million loan until all claims against it have been
satisfied. At the present time, there is one allowed claim of $34.7 million
against the Trust, which, under the terms of the Trust, would be entitled to a
distribution from the assets of the Trust of approximately $25 million. Other
than current administrative expenses, the only other potential obligations of
the Trust are the potential claims of the Riklis Entities. Any assets
remaining in the Trust after the payment of expenses and claims will be used
to repay all amounts

F-25
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

borrowed from the Company, including the $4.8 million loan, before any
distributions are made to the Trust Beneficiaries. The Company has been
advised that the claims by and against the Riklis Entities are the subject of
current negotiations and that no lawsuits have been commenced.

As of January 31, 1996, the Trust has approximately $56 million in cash
assets, exclusive of approximately $14 million due from McCrory's bankruptcy
estate, and liabilities for allowed claims of approximately $25 million.
Consequently, the Company does not anticipate being required to loan any
additional amounts to the Trust. Additionally, assuming that the Riklis
Entities cannot establish any monetary claims against the Trust, the Company
believes there will be sufficient funds to make the remaining required payment
on the allowed claim against the Trust and repay the $4.8 million loan from
the Company plus accrued interest. For financial statement purposes, however,
the Company continues to fully reserve for the loan to the Trust.

Contingent Liabilities to Pension Benefit Guaranty Corporation

The Pension Benefit Guaranty Corporation ("PBGC") filed certain contingent
claims, in excess of $37.7 million, with respect to Astrum's Chapter 11 case
for statutory liability for unfunded benefits accrued under the Schenley
Industries, Inc. ("Schenley") Employees Retirement and Benefit Plan and the
McCrory Pension Plan (collectively, the "Pension Plans"). Schenley and McCrory
are former affiliates of Astrum. The PBGC also filed claims against Astrum in
respect to the Pension Plans for due and unpaid contributions and unpaid
insurance premiums.

While the Company neither sponsored nor maintained the Pension Plans, it was
a member of a "controlled group" of related companies, as defined by the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"). As
such, the Company would have been jointly and severally liable under ERISA for
unfunded benefit liabilities in the event the Pension Plans terminated and for
any unpaid minimum funding contributions and insurance premiums. Pursuant to
the McCrory Settlement Agreements, McCrory has agreed to be primarily liable
under both Pension Plans, except that the Company agreed to make required
contributions under the Schenley plan, and one-half of the PBGC premiums for
such plans, through May 30, 1995. The Company contributed $575,000 to the
Schenley plan in fiscal 1996 and projects that it will not be required to make
any contributions to the Schenley plan in fiscal 1997. In order to avoid
having the PBGC terminate the Pension Plans prior to the date that the Plan
was confirmed, the PBGC and the Company entered into agreements on May 12,
1993 (the "Interim Agreements") with respect to each of the Pension Plans
whereby the Company agreed that following confirmation of the Plan it would be
secondarily liable for insurance premiums, all minimum funding contributions
and any unfunded benefit obligations in the event the Pension Plans terminate.
The term of the Interim Agreements has been extended on a month to month basis
since December 31, 1993. The Company expects to enter into a final settlement
agreement with the PBGC and the sponsors of Pension Plans to the effect set
forth in the McCrory Settlement Agreement during fiscal year 1997 (see note
19). The Company would be secondarily liable for such unfunded benefit
obligations if the sponsors of the Pension Plans do not satisfy such
obligations.

As of January 31, 1996, McCrory remains in bankruptcy. If McCrory fails to
emerge from bankruptcy or is otherwise unable to make the required funding
payments under either Pension Plan, the Company would become responsible for
those payments. There can be no assurance as to McCrory's emergence from
bankruptcy or its ability to make the required funding payments; however,
pursuant to the McCrory Settlement Agreement, McCrory has agreed to suspend or
freeze all future accrual of benefits under the McCrory plan and to assign,
upon the occurrence of certain circumstances, sponsorship of the Pension Plans
to the Company, thereby diminishing the risk that the PBGC would terminate the
Pension Plans.

The Company provided for the PBGC's claims in its consolidated financial
statements when it emerged from bankruptcy in the amount of $37.7 million,
which is included in other noncurrent liabilities in the

F-26
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

consolidated balance sheet at January 31, 1996 and 1995, and the Company
believes that it is unlikely that the ultimate amount of liability with
respect to the PBGC's claims will exceed the amount so provided for.

See additional information provided in note 19.

Contingent Liability with Respect to the Old Notes

The Plan provides for payment in full of 100% of the allowed claim of the
holders of certain old notes ("Old Notes") of E-II Holdings, Inc., including
approximately $16.4 million of interest on overdue installments of interest
accruing prior to the commencement of Astrum's bankruptcy case. Various
parties have challenged the allowability of the claim of the holders of the
Old Notes of E-II Holdings, Inc. to the extent of this $16.4 million amount on
the basis that interest on overdue installments of interest is not permitted
under applicable non-bankruptcy law. The Company provided for this liability
in its consolidated financial statements when it emerged from bankruptcy in
the amount of $16.4 million, which is included in other accrued expenses in
the consolidated balance sheet at January 31, 1996 and 1995. The Bankruptcy
Court has not yet ruled on this issue and the Company is actively pursuing a
resolution of the claim.

See additional information provided in note 19.

Union Agreements

At January 31, 1996, approximately 70% of the Company's 1,960 European
production employees are unionized under contacts which are renewed yearly.
Approximately 80% of the Company's 930 U.S. production employees are unionized
under a contract which is renewed every three years.

Other Contingent Obligations

In addition, the Company is a party to various legal proceedings and claims
in the ordinary course of business. The Company does not believe that the
outcome of any pending matters will materially adversely affect its
consolidated financial position, results of operations or liquidity.

F-27
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(15) OTHER INCOME (EXPENSE)--NET

Other income (expense)--net from continuing operations consisted of the
following:

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
----------------------------------------------------- -----------
SEVEN FIVE
NINE MONTHS ENDED YEAR ENDED MONTHS MONTHS
OCTOBER 31, JANUARY 31, ENDED ENDED
----------------------- ---------------- JANUARY 31, JUNE 30,
1996 1995 1996 1995 1994 1993
----------- ----------- ------- ------- ----------- -----------
(UNAUDITED) (UNAUDITED)
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Gain (loss) on
disposition of fixed
assets................. $ 171 $ 63 $ (245) $ (880) $ (163) $ 65
Foreign currency
transaction gains
(losses)............... 2,469 (2,727) (2,154) (1,707) (274) (778)
Gain on sale of
television station..... -- 5,368 5,368 -- -- --
Rental income........... 1,489 1,292 1,735 1,425 492 579
Favorable lawsuit
settlements............ -- -- -- -- -- 1,185
Favorable settlement of
claim (note 19d)....... 3,802 -- -- -- -- --
Adjustment of liability
for PBGC claims (note
19f)................... 11,100 -- -- -- -- --
Income (loss) of
unconsolidated
subsidiaries........... 13 -- -- (1,560) 436 (440)
Royalties(a)............ -- -- -- 3,490 5,499 --
Other--net.............. (591) (639) (737) 1,961 (486) (251)
------- ------- ------- ------- ------ ------
$18,453 $ 3,357 $ 3,967 $ 2,729 $5,504 $ 360
======= ======= ======= ======= ====== ======
</TABLE>
- --------
(a) The excess of amounts received over the discounted amount recorded at the
fresh start date for a royalty interest retained by the Company in certain
operations sold and discontinued (see note 2).

(16) PROVISION FOR RESTRUCTURING OPERATIONS

In the fourth quarter of fiscal 1996, management initiated a plan to
restructure the manufacturing and various administrative functions of its
American Tourister division. The restructuring plan will include relocation of
manufacturing operations from Jacksonville, Florida to the Company's Denver,
Colorado manufacturing facilities. Certain administrative functions will also
be consolidated in Denver. The restructuring plan will involve the termination
of approximately 113 manufacturing employees and 24 administrative employees
and is expected to be completed by August 1996. A provision for the
restructuring of $2,369,000 was charged to expense in the consolidated
statement of operations for the year ended January 31, 1996, including
$1,018,000 relating to employee termination benefits.

F-28
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(17) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following is a summary of the unaudited quarterly financial information:

<TABLE>
<CAPTION>
REORGANIZED COMPANY
--------------------------------------------
THREE MONTHS ENDED
--------------------------------------------
APRIL 30, JULY 31, OCTOBER 31, JANUARY 31,
1995 1995 1995 1996
--------- -------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales..................... $157,753 $167,670 $180,284 $169,502
======== ======== ======== ========
Gross profit.................. $ 63,965 $ 64,167 $ 70,117 $ 62,269
======== ======== ======== ========
Loss from continuing
operations................... $(13,357) $ (9,449) $(11,364) $(16,984)
======== ======== ======== ========
Net loss...................... $(13,357) $(17,491) $(11,364) $(19,235)
======== ======== ======== ========
Loss per share from continuing
operations................... $ (0.86) $ (0.59) $ (0.72) $ (1.07)
Loss per share................ $ (0.86) $ (1.10) $ (0.72) $ (1.21)
</TABLE>

<TABLE>
<CAPTION>
REORGANIZED COMPANY
--------------------------------------------
THREE MONTHS ENDED
--------------------------------------------
APRIL 30, JULY 31, OCTOBER 31, JANUARY 31,
1994 1994 1994 1995
--------- -------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
Net sales..................... $155,835 $159,207 $162,833 $157,577
======== ======== ======== ========
Gross profit.................. $ 64,369 $ 66,129 $ 67,726 $ 63,261
======== ======== ======== ========
Loss from continuing
operations................... $(10,956) $(10,452) $ (9,441) $(16,358)
======== ======== ======== ========
Net loss...................... $(20,773) $(18,257) $(18,550) $(53,999)
======== ======== ======== ========
Loss per share from continuing
operations................... $ (0.71) $ (0.67) $ (0.61) $ (1.06)
Loss per share................ $ (1.34) $ (1.18) $ (1.20) $ (3.50)
</TABLE>

F-29
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(18) INDUSTRY AND GEOGRAPHICAL AREA INFORMATION

The Company operates primarily in one industry consisting of the
manufacture, marketing, and distribution of luggage, including softside and
hardside suitcases, garment bags, casual bags, business cases and other travel
bags. The Company's operations in non-luggage products and licensing of non-
luggage products are not significant.

Certain geographical data was as follows:

<TABLE>
<CAPTION>
PREDECESSOR
REORGANIZED COMPANY COMPANY
------------------------------------- -----------
SEVEN FIVE
MONTHS MONTHS
YEAR ENDED JANUARY 31, ENDED ENDED
------------------------ JANUARY 31, JUNE 30,
1996 1995 1994 1993
----------- ----------- ----------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net Sales:
United States.......... $ 378,723 $ 390,559 $201,680 $103,393
Europe................. 276,219 232,733 121,183 84,631
Other.................. 27,881 16,064 9,974 5,789
Eliminations........... (7,614) (3,904) (1,737) (1,294)
----------- ----------- -------- --------
$ 675,209 $ 635,452 $331,100 $192,519
=========== =========== ======== ========
Operating income (loss):
United States.......... $ 22,323 $ 34,469 $ 16,517 $ 13,354
Europe................. 27,569 18,493 8,614 6,378
Other.................. (1,265) 4,148 4,505 1,132
----------- ----------- -------- --------
48,627 57,110 29,636 20,864
Unallocated costs--
net................... (58,003) (60,530) (32,717) (7,677)
----------- ----------- -------- --------
Operating income
(loss).............. $ (9,376) $ (3,420) $ (3,081) $ 13,187
=========== =========== ======== ========
</TABLE>

<TABLE>
<CAPTION>
JANUARY 31,
-----------------
1996 1995
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Identifiable Assets:
United States........................................... $344,733 $325,103
Europe.................................................. 196,660 171,869
Other................................................... 22,977 9,770
Net assets of discontinued operations................... -- 169,187
Corporate............................................... 57,073 190,071
-------- --------
Total................................................. $621,443 $866,000
======== ========
</TABLE>

Net sales and operating income in the United States includes export sales
and the resulting operating income for products produced within the United
States.

Operating income (loss) represents net sales less operating expenses. In
computing operating income (loss) none of the following items have been added
or deducted; interest income, interest expense, income taxes, other--net,
reorganization items, minority interest, operations discontinued and sold and
extraordinary items. General corporate expenses and amortization of
reorganization value in excess of identifiable assets are included in
Unallocated costs--net.

F-30
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Identifiable assets by geographic area are those assets that are used in the
Company's operations in each geographic area. Corporate assets consist of
inactive corporations which hold cash, fixed assets, other receivables,
investments and reorganization value in excess of identifiable assets.

For its foreign subsidiaries, the Company translates net assets at exchange
rates prevailing at the period ending date. Income and expenses are translated
at the average exchange rate during the period.

Net assets of the foreign subsidiaries were $109,107,000 and $71,637,000 at
January 31, 1996 and 1995, respectively. Included as a reduction to
stockholders' equity is the cumulative foreign currency translation equity
adjustment amounting to $2,338,000 and $1,572,000 at January 31, 1996 and
1995, respectively.

(19) EVENTS SUBSEQUENT TO DATE OF AUDITORS' REPORT (UNAUDITED)

(a) Effective May 15, 1996, the employment of Mr. Green as Chairman of the
Board, Chief Executive Officer and President ceased, and he was succeeded as
Chief Executive Officer and President by Richard R. Nicolosi. Mr. Green
resigned as a Director of the Company effective May 21, 1996. The Company
charged to expense in the second quarter of fiscal 1997 approximately $2.6
million related to the cessation of Mr. Green's employment and retention of
Mr. Nicolosi. Pursuant to Mr. Nicolosi's employment contract, the Company has
granted Mr. Nicolosi options to purchase 425,532 shares of common stock at an
exercise price of $18.25 per share (subject to customary antidilution
adjustments). Options to purchase 186,170 shares of common stock (the "Series
A Options") are time-vesting options and options to purchase 239,362 shares of
common stock (the "Series B Options") are subject to certain performance
requirements with respect to vesting. The options have a five year term. Fifty
percent (50%) of the Series A Options will vest on May 15, 1997 and the
remaining fifty percent (50%) will vest on May 15, 1998, so long as Mr.
Nicolosi remains continually employed by the Company through such date. All of
the Series B Options shall vest on April 15, 2001, so long as he remains
continually employed by the Company through April 15, 2001, subject to
accelerated, performance-based vesting as follows. The Series B Options will
vest on May 15, 1998 if Mr. Nicolosi remains continually employed by the
Company through such date and the average fair market value of the common
stock equals or exceeds $30.00 per share in any period of 30 consecutive days
prior to May 15, 1998. Notwithstanding the foregoing, if a change of control
event occurs prior to May 15, 1998, (i) all of the Series A Options will
automatically vest and (ii) all of the Series B Options will vest if Mr.
Nicolosi remains continually employed by the Company through the date of such
event and either the average fair market value of the common stock in any
period of 30 consecutive days prior to such event or the fair market value of
the common stock as of the date of such event, equals or exceeds $30.00 per
share.

Also in connection with the performance by Mr. Nicolosi of services pursuant
to his employment, the Company issued to Mr. Nicolosi 60,000 shares of
restricted common stock (the "Restricted Shares"). Fifty percent (50%) of the
Restricted Shares will vest on May 15, 1997 and the remaining fifty percent
(50%) will vest on May 15, 1998; provided that if a change of control event
occurs and Mr. Nicolosi remains continually employed by the Company through
the date of such event, then all Restricted Shares that have not vested will
become vested as of the date of such event. The Company is recognizing
compensation expense for the fair market value of the shares at the date of
grant over the two-year vesting period.

On June 6, 1996, the Company sold and issued to Mr. Nicolosi 55,000 shares
of common stock at the fair market value of $18.25 per share, or an aggregate
purchase price of $1,003,750.

(b) Effective as of May 15, 1996, the Company entered into agreements with
three executive officers to provide stock bonuses to each of them of 38,889
shares of common stock, payable if the executive remains continually employed
by the Company through the earlier of May 15, 1999 or one year after a change
of control

F-31
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

event. The Company is recognizing compensation expense equal to the fair
market value of the shares at May 15, 1996 ($18.25 per share) over the three-
year vesting period.

(c) During the first quarter of fiscal 1997, the Company sold certain
apparel tradename licenses in certain Pacific Rim countries for $3.9 million,
which is included in revenues for the nine months ended October 31, 1996.

(d) During the second quarter of fiscal 1997, the Company recorded
$3,802,000 of other income resulting from the favorable settlement for
$200,000 of a claim against the Company by a related party. The Company had
previously accrued $4,002,000 for such claim. The claim is part of the
Contingent Liability with Respect to the Old Notes described in note 14 and
relates to the claim for interest on overdue installments of interest accruing
prior to the bankruptcy of the Company's predecessor in 1993. The contingent
liability was recorded as part of the reorganization. The holders of the claim
were Apollo Investment Fund, L.P. ("Apollo") and an affiliate of Apollo.
Apollo and its affiliates own 45.78% of the outstanding shares of the
Company's common stock.

In a hearing on November 14, 1996, the Bankruptcy Court ruled in favor of
the Company on a motion to disallow these claims on the basis that compound
interest was not allowed under applicable law at the time the bond contracts
were entered into. The ruling is subject to appeal, and the Company has not
made any adjustment to the remaining recorded liability of $12.4 million
pending expiration of the appeal period or completion of the appeal process.

(e) The Company recorded a restructuring provision of $10.7 million in the
third quarter of fiscal 1997 as a result of a restructuring program, approved
by the Board of Directors and announced in October 1996, to further
consolidate functions and operations in North America, Europe, and the Far
East, and to reduce or eliminate certain other operations. The restructuring
is expected to be completed by October 1997.

The restructuring plan includes further consolidation of hardside luggage
production to Samsonite's largest U.S. facility located in Denver, Colorado
from other locations in the Americas, as well as eventual consolidation of
many administrative and control functions, again primarily to Denver. The
Company will eliminate as many as 450 positions worldwide, including
approximately 150 manufacturing positions and approximately 300 managerial,
office and clerical positions. The restructuring provision consists primarily
of costs associated with involuntary employee terminations and includes a cash
expense of $9.7 million and a non-cash expense of $1.0 million, both on a
pretax basis. The lenders under the Company's Senior Credit Facility have
agreed not to consider the restructuring provision in the computation of
lending rates or financial covenants.

(f) As discussed in note 14, the Company recorded a liability of $37.7
million, as part of the reorganization in 1993, for claims made by the PBGC
for underfunded pension plans (the "Plans") and unpaid insurance premiums for
the Plans, which were sponsored by other companies. The Company and these
other companies were part of a "controlled group", as defined by the
Employment Retirement Income Security Act of 1974, as amended, and as such the
Company had joint and several liability for the Plans. At the time of the
reorganization, the Company entered into temporary agreements with the PBGC
under which the Company agreed to be contingently liable for the Plans and
permanent agreements with the other companies which gave the Company the right
to assume sponsorship of the Plans should the other companies default on their
obligations under the

F-32
<PAGE>

SAMSONITE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

Plans. These agreements also confirmed the agreement of the primarily liable
companies to the permanent cessation of benefit accruals and to the making of
any plan amendments that would increase benefit liabilities under the Plans
without the consent of the Company. The right to assume sponsorship of the
Plans allows the Company to avoid having the PBGC terminate the Plans and make
a claim against the Company for the PBGC regulatory prescribed termination
value. This termination value is substantially higher than the liability would
be for the Company to assume sponsorship and fund the Plans over their
remaining lives. Permanent agreements were entered into among the PBGC, the
Company, and the primarily liable companies in June 1996 which became
effective on August 6, 1996 when the Bankruptcy Court entered an order
approving the agreements. The permanent agreements imposed limitations on PBGC
actions against the Company in respect of benefit liabilities under the Plans,
including the requirement that the PBGC proceed against the primarily liable
companies before proceeding against the Company. The primarily liable
companies have continued to meet their obligations to the Plans since 1993,
although these companies remain in reorganization as of October 31, 1996.

The liability originally recorded in 1993 of $37.7 million was recorded on
the basis of a PBGC termination value. As a result of the permanent agreements
giving the Company the right to assume sponsorship of the Plans, the Company
has evaluated the liability as if it were to assume sponsorship, and has
adjusted the recorded liability to $26.6 million. This amount represents
management's best estimate of the contingent liability based on the pension
benefit obligation of the Plans discounted at 7.25% reduced by the market
value of the Plans' assets at October 31, 1996. The corresponding reduction in
the liability is recorded in other nonoperating income in the amount of $11.1
million. The Company will periodically reassess the amount of the liability
for the effects of changes in circumstances and assumptions.

(g) At October 31, 1996, the Company has authorized 2,550,000 shares for
granting under the 1995 Stock Option and Incentive Award Plan described in
note 10. At October 31, 1996, options outstanding under this plan were as
follows:

<TABLE>
<CAPTION>
SHARES UNDER OPTION OPTION PRICE EXERCISABLE OPTIONS
------------------- -------------- -------------------
<S> <C> <C>
2,123,610 $10.875-$35.50 142,904
</TABLE>

At October 31, 1996, the Company had outstanding options under all incentive
plans and employment agreements for a total of 4,402,810 shares at option
prices ranging from $10.875 to $35.50 per share. Options for 1,996,572 shares
were exercisable at October 31, 1996. Options for 17,500 shares were exercised
at a price of $11.14 per share during the nine months ended October 31, 1996.

F-33
<PAGE>

[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

Inside Back Cover:

"Samsonite...
Meeting consumer needs throughout the world"

[Photographs of consumers utilizing various Company suitcases and business
cases]

<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CON-
NECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED BY THE COMPANY, THE SELLING STOCKHOLDERS OR THE UNDERWRITERS. THIS PRO-
SPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO
BUY, THE COMMON STOCK IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT
IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET FORTH IN
THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

---------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents by Reference.......................... 3
Prospectus Summary....................................................... 4
Risk Factors............................................................. 11
Use of Proceeds.......................................................... 15
Price Range of Common Stock.............................................. 15
Dividend Policy.......................................................... 16
Dilution................................................................. 16
Capitalization........................................................... 17
Selected Historical and Pro Forma Consolidated Financial Data............ 18
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 22
Business................................................................. 34
Management............................................................... 44
Principal and Selling Stockholders....................................... 48
Description of Capital Stock............................................. 51
Shares Eligible for Future Sale.......................................... 53
Underwriting............................................................. 54
Legal Matters............................................................ 56
Experts.................................................................. 56
Additional Information................................................... 56
Index to Consolidated Financial Statements............................... F-1
</TABLE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

7,823,156 SHARES

[LOGO OF SAMSONITE(R) APPEARS HERE]

COMMON STOCK

---------------

PROSPECTUS

---------------

MERRILL LYNCH & CO.
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
MORGAN STANLEY & CO.
INCORPORATED
PAINEWEBBER INCORPORATED
SMITH BARNEY INC.

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Tel: (212) 735-3000
Fax: (212) 735-2000

January 8, 1997

VIA EDGAR TRANSMISSION

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Division of Corporate Finance

Re: Samsonite Corporation
Registration Statement on Form S-3
(File No. 333-18405)
----------------------------------

Transmitted herewith for filing, pursuant to Rule 424 (a) under the
Securities Act of 1933, as amended, is the preliminary U.S. Prospectus (the
"U.S. Prospectus"), dated January 7, 1997 of Samsonite Corporation (the
"Company") with respect to the domestic offering of the Company's common stock,
$.01 par value.

In the event that the Staff has any questions or comments concerning
the filing, please contact the undersigned at (212) 735-4124 or Gregory A.
Fernicola at (212) 735-2918. Thank you for your assistance and cooperation.

Very truly yours,

/s/Seth L Pearlstein
Seth L. Pearlstein