Exhibit 10.38

December 24, 2002

Samsonite Corporation
11200 East 45th Avenue
Denver, CO 80239

Ladies and Gentlemen:

        1. This letter will confirm our understanding that Jefferies &
Company, Inc. ("Jefferies") has been retained by Samsonite Corporation
("Samsonite" or the "Company") as its financial advisor to assist the Company
with respect to: (i) the raising of additional capital through private
placement(s) of debt, equity or other securities of the Company (a "Financing");
(ii) the amendment, refinancing, exchange, conversion, forgiveness or
renegotiation of existing debt obligations and/or preferred stock of the Company
(a "Restructuring"); (iii) an acquisition, merger, reorganization or other
business combination involving the Company as a target, whether effected in one
transaction or a series of transactions (a "Sale Transaction", and with a
Financing and Restructuring, each and collectively a "Transaction"); and
(iv) such other matters as we may mutually agree to.

        As financial advisor, Jefferies will provide the services of a qualified
team of professionals, including Ray Minella and Gregg Feinstein, who will
devote such time and effort as shall be necessary and appropriate to diligently
perform the assignment hereunder; provided, that Jefferies shall have no
obligation to provide the services of either Mr. Minella or Mr. Feinstein to the
extent that either of them is unavailable due to circumstances outside of the
control of Jefferies, Mr. Minella or Mr. Feinstein. The services to be rendered
by Jefferies, as required in connection with a Transaction, shall include, among
others, the following:

a)performing due diligence on the Company and its financial results and
projections;

b)assisting the Company to identify, and in discussions with, potential new
investors and lenders;

c)assisting the Company in the preparation of materials to be presented to
potential new investors and lenders;

d)assisting the Company in structuring and implementing a "Recapitalization
Plan", which as contemplated by Section 9.30 of the Samsonite Credit Agreement
("Section 9.30"), as amended (see Section 2.19 of the Seventh Amendment thereto)
and referred to herein may include: (i) a Restructuring of the Company's
existing preferred stock (the "Preferred Stock"), (ii) a Restructuring of the
Company's outstanding senior subordinated notes and/or (iii) the raising of
Financing;

e)assisting the Company in providing the agents of the Company's current credit
facility with periodic status reports as contemplated by Section 9.30;

f)acting as a financial advisor and/or a dealer-manager for any securities
tender or exchange offer in conjunction with activities contemplated in this
agreement; and

g)acting as placement agent with respect to the private placement of preferred
stock or common equity and as dealer manager with respect to any rights
offering.

        The services described in clauses (a) through (g) above are referred to
herein collectively as the "Services."

        The parties confirm that Jefferies' engagement hereunder is
non-exclusive, and the Company retains the right to retain one or more parties
to render services in connection with any Restructuring, Financing or Sale
Transaction contemplated hereby. The retention of any such party will not affect
the fees payable to Jefferies, except as expressly provided herein. Jefferies
agrees to provide the services contemplated hereby whether or not the Company
retains or terminates any such party. Jefferies agrees to cooperate with any
such party in rendering the financial advisory services contemplated by this
agreement and to make any and all Company materials (including work papers)
available to such party, and the Company agrees to use its reasonable efforts to
cause any such party to make any and all such materials available to Jefferies.

        2. At the Company's request, Jefferies will render an opinion, or
opinions if necessary, (in writing, if so requested) to both the Company's Board
of Directors and the Special Committee of the Board of Directors formed to
consider a Restructuring or Sale Transaction (the "Special Committee") relating
to a Recapitalization Plan or Sale Transaction (the "Opinion") as to the
fairness to the Company, its common stockholders and its preferred stockholders,
from a financial point of view, of: (a) the transactions contemplated in a
Recapitalization Plan; (b) the consideration to be received by the Company or
its shareholders in connection with a Sale Transaction; or (c) in the case that
the Sale Transaction takes the form of a stock-for-stock merger, the fairness of
the exchange ratio. The nature and scope of our investigation as well as the
scope, form and substance of the Opinion shall be such as Jefferies considers
reasonably appropriate. It is understood that the Opinion will be dated as of a
date reasonably proximate to the date of the definitive agreement between the
Company and a third party providing for the Recapitalization Plan or Sale
Transaction, or such other date or dates as the Company shall reasonably
request. Jefferies' financial advice, including any Opinion, is intended solely
for the benefit and use of the Board of Directors of the Company and the Special
Committee in considering the Recapitalization Plan or Sale Transaction, is not
on behalf of, and shall not confer rights or remedies upon, any other person,
and may not be used or relied upon for any other purpose. The Company will treat
Jefferies' advice including any Opinion as confidential and will not reproduce,
summarize, describe, refer to or otherwise disclose it to any third party in any
manner without Jefferies' prior written approval; provided, that the Company may
reproduce the Opinion in full in any proxy statement, registration statement or
Schedule 14D-9 relating to the Recapitalization Plan or Sale Transaction which
the Company must, under any applicable law, file with any government agency or
distribute to its stockholders and where such filing must include the Opinion.
In such event, the Company may also include references to Jefferies and
summarize the Opinion (in each case in such form as Jefferies shall provide or
reasonably pre-approve in writing) in any such document.

        3. The Company agrees to pay Jefferies, as compensation for its
services, the following fees:

(a)If, during the term of this engagement or the Tail (as defined in
Section 14), the Company consummates a Sale Transaction or a Successful
Restructuring (as defined below), subject to the provisions of the next
succeeding paragraph, the aggregate fee payable to Jefferies shall be
$3.95 million for all Services rendered (including, if requested by the Company,
(i) the rendering of an Opinion as described in Section 2 acceptable to the
Company and its counsel and (ii) acting as a placement agent for any privately
placed debt or equity securities of the Company), plus, if applicable, the fees
provided for in Section 3(c) below; provided, that $500,000 of the fee relating
to the rendering of an Opinion as described in clause (i) above shall be payable
upon the rendering of such Opinion, which amount shall be non-refundable and
fully credited against any other amounts payable pursuant to this Section 3. A
"Successful Restructuring" means a Restructuring (including a Restructuring
organized by Ares Management L.P) pursuant to which substantially all of the
outstanding Preferred Stock is either redeemed or converted into the Company's
common stock, cash or a combination thereof; provided, that upon consummation of
such Restructuring the Company has adequate liquidity (including the
availability of borrowings under any bank credit facility) to operate its
business in accordance with the business plan approved by the Company's Board of
Directors as of the date of such consummation, for at least 24 months following
such date (the

"Liquidity Period"), provided further that if the Liquidity Period is less than
24 months but at least 12 months, the aggregate fee payable to Jefferies
pursuant to this Section 3(a) will be reduced to $2.0 million, which amount
shall not be subject to reduction pursuant to the penultimate sentence of
Section 3(b) or the proviso in clause (i) of Section 3(c) hereof. If a
Restructuring is consummated which does not constitute a Successful
Restructuring because the Liquidity Period is less than 12 months, Jefferies may
discuss with the Company whether a fee, if any, should be paid for services
rendered in connection therewith, which fee, if any, shall be at the discretion
of the Company.

Jefferies acknowledges that the Company has entered into a letter agreement with
another investment banking firm (the "Other Firm"), dated March 13, 2002 (the
"Letter"). If any amounts are paid to the Other Firm in connection with the
services contemplated by the Letter, the fee payable to Jefferies pursuant to
this Section 3(a) shall be reduced by an amount equal to the lesser of
(i) 66.67% of the amounts paid to the Other Firm and (ii) $1.75 million (such
lesser amount, the "Reduction"). In the event that the Other Firm receives any
such amounts after Jefferies has received its fee pursuant to this Section 3(a),
Jefferies shall repay the Company an amount equal to the Reduction immediately
upon receipt of notice of such payment to the Other Firm. In no event, however,
will the aggregate fees payable to Jefferies pursuant to Sections 3(a) and
3(c) be less than the amounts paid to the Other Firm after the date hereof
directly or indirectly pursuant to the Letter.

(b)If, during the term of this engagement, a Successful Restructuring or Sale
Transaction has not been consummated and the Company pursues an amendment,
extension or refinancing of its existing senior secured debt facility, a fee
shall be payable to Jefferies as follows: (i) in connection with any extension
of such facility for a period of not less than one year (i.e., until June 2004),
such fee shall equal 0.5% of the amount available under such facility at the
time of such extension and (ii) in connection with any refinancing of such
facility, such fee shall equal 1.0% of the amount available under such facility;
provided, that 50% of such 1.0% fee shall be payable upon acceptance of the
related commitment and the remaining 50% of such 1.0% fee shall be payable if
and when the funding and closing under the facility occurs. If at any time
during the term of this engagement a fee becomes payable pursuant to
Section 3(a), unless otherwise provided in Section 3(a), such fee shall be
reduced by an amount equal to 50% of any fee payable pursuant to this
Section 3(b). No fee shall be payable to Jefferies pursuant to this
Section 3(b) at any time a fee is payable or has been paid pursuant to
Section 3(a).

(c)If, during the term of this engagement, the Company requests that Jefferies
act as a dealer manager with respect to a tender or exchange offer for the
103/4% Senior Subordinated Notes of the Company, if greater than the minimum
securities required for the completion of such offer are tendered, a fee shall
be payable to Jefferies upon consummation of such tender or exchange offer as
follows: (i) if a fee would be payable to Jefferies pursuant to Section 3(a),
the fee payable to Jefferies pursuant to this Section 3(c) shall be 0.5% of the
aggregate principal amount of 103/4% Senior Subordinated Notes that are accepted
for tender or exchange, provided that any fees paid or payable pursuant to
Section 3(a), unless otherwise provided in Section 3(a), shall be reduced by 50%
of such 0.5% fee, and (ii) if no fee would be payable to Jefferies pursuant to
Section 3(a), the Company and Jefferies agree to negotiate an appropriate fee
for such services at the time of such request.

        Any fees payable to Jefferies pursuant to this Section 3 will be paid in
cash via wire transfer to an account designated by Jefferies.

        4. In addition to any fees payable to Jefferies hereunder, the Company
shall, upon request from time to time, reimburse Jefferies for up to $100,000 of
its reasonable (and documented) travel and other out-of-pocket expenses
(including fees and expenses of counsel) incurred in connection with, or arising
out of, Jefferies' activities hereunder (including those expenses incurred prior
to the date hereof which relate to such engagement); provided, that such
reimbursable expenses shall not include compensation payable to employees of
Jefferies.

        5. The Company recognizes and confirms that, in advising the Company and
performing its engagement hereunder, Jefferies will be using and relying on
data, material and other information ("Information") furnished to Jefferies by
the Company or that is publicly available and that Jefferies may assume and rely
upon the accuracy and completeness of the Information so furnished without
independent verification. Jefferies has not assumed any responsibility for
independent verification of such Information or any independent valuation or
appraisal of any assets of the Company.

        6. As Jefferies will be acting on behalf of the Company in connection
with its engagement hereunder, the Company and Jefferies acknowledge that they
have entered into a separate indemnification agreement, dated October 21, 2002
(the "Indemnification Agreement"), providing for, among other things, the
indemnification by the Company of Jefferies and certain related entities. Such
indemnification agreement is an integral part of this agreement and will apply
fully to Jefferies' activities pursuant to its engagement. This agreement and
the Indemnification Agreement represent the entire agreement of the parties with
respect to the subject matter hereof and thereof and supercede all other
agreements between the parties, whether written or oral.

        7. The Company acknowledges that Jefferies has been retained to act
solely as an advisor to Samsonite. In such capacity, Jefferies shall act as an
independent contractor and any duties of Jefferies arising out of its engagement
pursuant to this agreement shall be owed solely to the Company.

        8. Jefferies shall keep confidential and shall not disclose the terms of
this agreement; provided that Jefferies may disclose its terms to a court or
governmental agency to the extent that, in the reasonable opinion of counsel,
such disclosure is required.

        9. The Company acknowledges that, upon consummation of a Transaction,
Jefferies may, at its option and expense, place customary "tombstone"
advertisements in such newspapers and periodicals as it may choose with the
prior approval of the Company, which approval shall not be unreasonably
withheld.

        10. This agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in and
to be performed in that state.

        11. No waiver, amendment or other modification of this agreement shall
be effective unless in writing and signed by each party to be bound thereby.

        12. Each of the Company and Jefferies irrevocably and unconditionally
submits to the exclusive jurisdiction and venue of any State or Federal court
sitting in New York City over any action, suit or proceeding arising out of or
relating to this agreement. Each of the Company and Jefferies irrevocably and
unconditionally waives any objection to the laying of venue of any such action
brought in any such court and any claim that any such action has been brought in
an inconvenient forum. Each of Jefferies and the Company (on its own behalf and,
to the extent permitted by law, on behalf of its shareholders) waives any right
to trial by jury in any action, claim, suit or proceeding (whether based upon
contract, tort or otherwise) related to or arising out of the engagement of
Jefferies pursuant to, or the performance by Jefferies of the services
contemplated by, this agreement.1

        13. This agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and each of which shall be
deemed an original.

        14. Either Jefferies or the Company can terminate this engagement upon
the earlier of: (i) the consummation of a Restructuring or a Sale Transaction,
or (ii) September 30, 2003, except that the Company may terminate such
engagement at any time on or after June 30, 2003 upon two weeks written notice.
Notwithstanding any termination by the Company, if a Transaction is consummated
or is subject to a definitive agreement entered into during the term of this
agreement or during the six-month period (the "Tail") commencing on the date of
such termination, Jefferies shall be entitled to the same amount of fees (the
"Termination Amount") that it would otherwise have received (subject to the next
sentence of this paragraph), if its engagement hereunder had not been so
terminated, as if such Transaction occurred during the term of this engagement,
regardless of when such Transaction actually closes, payable at the closing of
such Transaction, and shall be entitled to reimbursement of its expenses in
accordance with Section 4, but only to the extent such expenses are incurred
prior to notice of termination. The Termination Amount shall be subject to any
credits, caps and other limitations applicable to fees payable pursuant to
Section 3 of this agreement. Notwithstanding any such termination, the
provisions of Sections 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 will survive such
termination.

        15. We are pleased to accept this engagement and look forward to working
with you. Please confirm that the foregoing is in accordance with your
understanding by signing and returning to us two (2) original copies of this
letter. Jefferies will then counter-sign, returning one (1) duly executed
original to your attention at which time there shall be a binding agreement
amongst the parties.

 
 
Very truly yours,
 
 
JEFFERIES & COMPANY, INC.
 
 
By:
 
/s/  GREGG FEINSTEIN              

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        Name:   Gregg Feinstein         Title:   Managing Director
Director of Mergers and Acquisitions

Accepted and agreed to as of the date hereof:

SAMSONITE CORPORATION
By:
 
/s/  RICHARD H. WILEY      

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    Name:   Richard H. Wiley     Title:   Chief Financial Officer