---

---




UNITED
   STATES





SECURITIES AND
   EXCHANGE COMMISSION


WASHINGTON, D.C.
   20549





FORM
   10-K





|x | ANNUAL
     REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
     1934
|- | ----------------------------------------------------------------------------------------------




For the fiscal
   year ended January 31, 2000





OR





| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------------




For the transition
   period from
   
   to





Commission file
   number 0-23214





SAMSONITE
   CORPORATION


(Exact name of
   registrant as specified in its charter)





|Delaware
   (State or other
     jurisdiction
   
   of incorporation or organization)
   
   11200 East 45th
     Avenue
   Denver,
     Colorado
   (Address of
     principal executive offices) |  | 36-3511556
   (I.R.S. employer
     identification no.)
   
   80239
   (ZipCode) | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------- | 




Registrants
   telephone number, including area code: (303) 373-2000





Securities
   registered pursuant to Section 12(b) of the Act:





None





Securities
   registered pursuant to Section 12(g) of the Act:





Common Stock, par
   value $.01 per share


(Title of
   class)





Indicate by check
   mark whether the registrant (1) has filed all reports required to be filed
   by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
   preceding 12 months (or for such shorter period that the registrant was
   required to file such reports) and (2) has been subject to such filing
   requirements for the past 90 days. Yes x No  ̈





Indicate by check
   mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
   S-K is not contained herein, and will not be contained, to the best of
   registrants knowledge, in definitive proxy or information statements
   incorporated by reference in part III of this Form 10-K or any amendment to
   this Form 10-K.  ̈





As of April 14, 2000,
   the registrant had outstanding 19,725,266 shares of Common Stock, par value
   $.01 per share. The aggregate market value of such Common Stock held by
   non-affiliates of the registrant, based upon the closing sales price of the
   Common Stock on April 14, 2000, as reported on the Nasdaq National Market
   was approximately $39.7 million. Shares of Common Stock held by each officer
   and director and by each person who owns 5 percent or more of the
   outstanding Common Stock have been excluded in that such persons may be
   deemed to be affiliates. This determination of affiliate status is not
   necessarily a conclusive determination for other purposes.





---

---




INDEX





|                                                             |  |                                                                                                 |  | Page
|------------------------------------------------------------ |  | ----------------------------------------------------------------------------------------------- |  | ----
|PART
     I                                                 
|Item 1.                                                      |  | Business                                                                                        |  | 3   
|Item 2.                                                      |  | Properties                                                                                      |  | 10  
|Item 3.                                                      |  | Legal
     Proceedings                                                                          |  | 10  
|Item 4.                                                      |  | Submission of
     Matters to a Vote of Security Holders                                        |  | 10  
|                                                            
|PART
     II                                                
|Item 5.                                                      |  | Market for
     Registrants Common Equity and Related Stockholder
     Matters                 |  | 11  
|Item 6.                                                      |  | Selected Financial
     Data                                                                    |  | 12  
|Item 7.                                                      |  | Managements
     Discussion and Analysis of Financial Condition and Results of
     Operations |  | 14  
|Item 7A.                                                     |  | Quantitative and
     Qualitative Disclosures about Market Risk                                 |  | 26  
|Item 8.                                                      |  | Financial
     Statements and Supplementary Data                                                |  | 27  
|Item 9.                                                      |  | Changes in and
     Disagreements with Accountants on Accounting and Financial
     Disclosure  |  | 27  
|                                                            
|PART
     III                                               
|Item 10.                                                     |  | Directors and
     Executive Officers of the Registrant                                         |  | 28  
|Item 11.                                                     |  | Executive
     Compensation                                                                     |  | 28  
|Item 12.                                                     |  | Security Ownership
     of Certain Beneficial Owners and Management                             |  | 28  
|Item 13.                                                     |  | Certain
     Relationships and Related Transactions                                             |  | 28  
|                                                            
|PART
     IV                                                
|Item 14.                                                     |  | Exhibits, Financial
     Statement Schedule, and Reports on Form 8-K                            |  | 29  
|Signatures                                                   |  | 30                                                                                             
|Index to
     Consolidated Financial Statements and Schedule |  | F-1                                                                                            
|Index to
     Exhibits                                       |  | E-1                                                                                            




PART
   I





ITEM
   1.    BUSINESS





General





We are one of the
   worlds largest designers, manufacturers and distributors of luggage.
   We sell our products using a number of quality brand names, includingSamsonite®and American Tourister®. With net sales of
   $767.7 million for our fiscal year ended January 31, 2000, we are a leader
   in the highly fragmented luggage industry. The vast majority of our
   competitors have annual luggage sales that are less than 15% of
   ours.





We offer a broad
   range of luggage and luggage-related products. These include suitcases,
   garment bags, business cases, computer cases, casual bags and sports bags.
   In fiscal year 2000, we began manufacturing and selling luxury luggage,
   casual bags, clothing, shoes and accessories under Samsonite®
   Black Label and Hedgren® brands. We also license our brand
   names for use on products that include travel accessories, leather goods,
   handbags, clothing and furniture.





We design the vast
   majority of our products at our research, development and design centers in
   Europe and the United States. Our products are produced around the world at
   13 Samsonite-operated manufacturing facilities or by carefully selected
   third party suppliers. We sell our products in more than 100 countries at
   approximately 28,000 retail locations that include department stores,
   specialty stores, mass merchants, warehouse clubs and catalog showrooms. We
   also sell certain products through approximately 200 Samsonite-operated
   stores in the United States, Canada, Latin American, Asia and Europe. In
   addition, our products are available through approximately 50 of our
   wholesale customers websites.





Our principal
   corporate office is at 11200 East 45th Avenue, Denver, Colorado 80239, and
   our telephone number is (303) 373-2000.





Luggage
   Leader





Our leading position
   in the global luggage industry is due primarily to:





Widely-Recognized
   Brand Names.    Samsonite andAmerican
   Tourister are two of the most widely-recognized luggage brand names in
   the world. OurLark®brand is also well-recognized in the premium
   segment of the market. We also license and sell products using the
   well-known brandsHedgren andHummer®.





Innovative Quality
   Products.    We design, manufacture and sell
   innovative, quality products. Consumers know our products to be well-made
   and durable and to contain features and functions that are innovative. We
   are an industry leader in new luggage technologies due to our substantial
   product development efforts. We introduced many of todays most
   successful luggage products and features, including molded suitcases on
   wheels, suitcases with a built-in luggage cart and full-featured structured
   garment bags.





Global
   Manufacturing and Distribution.    Our global
   production network consists of 13 Samsonite-operated manufacturing
   facilities and carefully-selected third-party suppliers in the Far East,
   Eastern Europe and the Dominican Republic. Our large size and leading
   position in the worldwide luggage industry allow us volume-driven purchasing
   and manufacturing economies. By operating our own facilities to produce
   hardside luggage and certain softside products, we control manufacturing
   quality and reduce production lead time and delivery costs. Our global
   sourcing network also enables us to opportunistically source products from
   countries with low production costs and favorable currency exchange rates.
   Our luggage distribution networks in the United States and Europe are the
   largest and most technologically advanced in the industry.





Our
   Strategy





Our strategy is to
   use our worldwide leading position and our substantial existing
   assetsour strong brands, our quality products and our global
   capabilitiesto gain a larger portion of worldwide luggage and luggage
   related sales. We intend to do this by:





Expanding Channels
   of Distribution.We are increasing our presence
   in channels of distribution where we are under-represented using targeted
   sales efforts tailored to each channel. For instance, in fiscal year 2000 we
   began aggressively selling ourAmerican Tourister products to
   specialty stores, department stores, mass merchants and other high-volume
   merchants (known in Europe as hyper-markets). We are also
   implementing a strategy to use the Internet as an extension of our retail
   distribution channel and to develop and enhance business to business
   commerce while minimizing conflicts with our existing channels of
   distribution.





Expanding Product
   Offerings.We are increasing our product
   offerings by designing, manufacturing and selling more casual and sport
   bags, luxury luggage, computer cases, clothing, shoes and accessories. To do
   this, we have enlisted the aid of internationally-recognized designers and
   have created or licensed new upscale brands that includeHummer, HedgrenandSamsonite Black Label.





Creating
   Innovative Products.Samsonites historical
   success and the strength of its brands are based, in large part, upon
   continually creating technologically superior, innovative luggage. Recently,
   we introduced in EuropeZiplite®, an extremely light-weight
   hardside luggage made from an ultra-thin, flexible polymer, and in the
   United StatesCarbon 2010®, a hybrid luggage that possesses the
   desirable qualities of both hardside and softside luggage.





Continuing
   International Expansion.We continue to look for
   opportunities to expand into countries where growing economies and reduced
   political and trade barriers provide opportunities for long-term growth. We
   are growing our existing business in a number of emerging foreign markets,
   including India, China, Latin America and the Pacific Rim.





Improve product
   marketing execution, including sales and inventory forecasting, brand
   positioning, product development and customer
   service.The strength of our brand and product
   marketing has been key to our historical success. In order to return our
   operations to historical levels of profitability, we are focusing resources
   to improve forecasting, brand positioning and advertising, product
   development and customer service.





Luggage
   Market





The worldwide luggage
   market encompasses a wide range of products, product quality and prices. At
   one end of the market are high-quality, full-featured products that have
   prestigious brand names, higher prices and selective distribution. Beneath
   this luxury segment is a broad middle market segment in which
   products are differentiated by features, brand name and price. Within this
   market segment sales are largest at mid and low prices. Product
   differentiation decreases and breadth of distribution increases at lower
   price levels. At the other of end of the luggage market, unbranded products
   with few differentiating features are sold in significant volumes and at low
   margins, competing primarily on the basis of price. We sell products into
   all three segments of the luggage market.





Products





We offer a broad
   range of products that include softside suitcases, garment bags, hardside
   suitcases, casual bags, sport bags, business cases, computer cases,
   clothing, shoes, accessories and other non-luggage products.





Fiscal 2000 Sales
   Mix by Product Type





|Product
     Type                        |  |    
|---------------------------------------- |  | ---
|Softside suitcases
     and garment bags |  | 44 
|Hardside
     suitcases                  |  | 27 
|Casual
     bags                         |  | 12 
|Business and
     computer cases         |  | 6  
|Footwear and
     clothing               |  | 2  
|Other                                    |  | 9  
|                                         |  |    
|                                         |  | 100
|                                         |  |    




Below is our market
   positioning for each of our principal brands:





|Brand
     Name            |  | Market
     Positioning       |  | U.S.
     Consumer                       |  | Europe
     Consumer                    
|-------------------------- |  | ----------------------------- |  | ---------------------------------------- |  | ----------------------------------------
|Samsonite Black
     Label |  | super
     luxury             |  | very
     affluent                       |  | very
     affluent                      
|Lark                       |  | luxury                        |  | affluent                                 |  | affluent                                
|Samsonite                  |  | high-quality,
     innovative |  | mid to upper
     income                 |  | affluent                                
|Hedgren                    |  | sport
     luxury             |  | affluent                                 |  | affluent                                
|American
     Tourister    |  | quality and
     value        |  | middle income and
   
   value-conscious |  | middle income and
   
   value-conscious




Softside Suitcases
   and Garment Bags.Approximately 60% of the
   softside suitcases and garment bags we sell are made by independent
   suppliers located around the world. We produce the balance of our softside
   suitcases and garment bags in our own facilities located in several
   countries. Our softside products are sold under all of our major
   brands.





We sell numerous
   softside products with innovative proprietary features. These include theUltravalet® garment bag that has a unique wrinkle-free folding
   system and is available on wheels and the EZ Big Wheel® system
   that allows very easy passage over carpets and rough surfaces.





Hardside
   Suitcases.We manufacture most of our hardside
   suitcases in our own factories. Our hardside luggage is sold globally under
   the Samsonite brand. In the United States and Europe, our hardside
   luggage is also sold under the American Tourister brand. In Europe
   and the United States, hardside products are offered in several lines under
   each brand. Each line includes a variety of sizes and styles to suit
   differing consumer needs.





Our hardside
   suitcases have proprietary features that include the patented
   Piggyback® system that incorporates a luggage cart, an extendable
   handle and a strap allowing additional bags to be attached and transported,
   and our EZ Cart® system that has four wheels to support the weight of
   the case and a push handle to provide optimum stability and
   mobility.





In fiscal year 2000
   we introduced two unique products in the hardside area that include
   important proprietary designs and features. The first is Ziplite, a
   hardside luggage taking the form of a sleek pod that zips shut, rather than
   latching shut, and that is made of a thin, light-weight polymer which is
   laminated to an attractive textile using a patented process. The second is
   Carbon 2010, a hybrid of hardside and softside luggage for which
   patents are pending.Carbon 2010 possesses the features that are
   sought after in each of hardside luggage and softside luggage. The bottom of
   a Carbon 2010suitcase is a shell of light, rugged ABS that provides
   structure to the bag and helps protect the contents. The top half is
   attractive, high quality DuPont® Cordura® Plusfabric
 with zippered pockets for easy access and organization and adjustable cinch
   straps for security and capacity control.





Casual and Sport
   Bags.The worldwide market for casual and sport
   bags is larger than the market we have historically sold our products into,
   that being luggage and business cases (suitcases, garment bags, business
   cases and computer cases). The casual and sport bag market includes
   backpacks, shoulder packs, fanny packs, unstructured bags,
   athletic bags, school bags, duffle bags, ladies handbags, other types
   of bags and containers for eyeglasses, pencils and pens. We entered this
   market in a modest way in the last several years with the Samsonite
   Sport® and Trunk & Co.® product lines. We decided in
   fiscal year 2000 to expand significantly our business in this important
   market and did so by introducing products under our licensedHedgren,
   Hummer andWild California brands. We believe that by
   offering these consumers a number of product lines having varying styles and
   price points, we have the opportunity to capture a larger portion of this
   market.





Business and
   Computer Cases.We sell a variety of business and
   computer cases under our Samsonite and American Tourister
   brand names. We design and manufacture most of the hardside briefcases we
   offer. We design and have our suppliers manufacture our softside briefcases
   and computer cases. In addition, we license our brands to experienced
   business case producers for the sale of certain of these products in the
   United States.





Luxury
   Products.In the first quarter of fiscal year
   2001, we created our Specialty Products Groupe, which designs, manufactures
   and sells super-premium luggage, casual and sport bags, clothing, shoes and
   accessories under the brands Samsonite Black Label, Hedgrenand
   Samsonite. Our Samsonite Black Label and Hedgrenpremium product lines each operate under the creative direction of its
   own internationally-recognized designer. Our first offerings in each of our
   luxury lines were very well received by the fashion world and the
   press.





Licensed
   Products.We license our luggage brand names and
   certain apparel brand names, which include McGregor®, Botany
   500® andBert Pulitzer®, to third parties for the sale of
   a variety of products. Our licensees are selected for competency in their
   product categories and usually sell parallel lines of products under other
   brands. Our licensed products include leather business and computer cases,
   apparel, furniture, travel accessories, photo and audio storage gear,
   personal leather goods, ladies handbags, umbrellas, binoculars, pet
   carriers, auto accessories, cellular phone cases, school bags and
   childrens products.





Product
   Development.We devote significant resources to
   new product design and development. We use market research to identify
   consumers needs and style preferences and develop products that meet
   those needs and preferences. We employ designers and development engineers
   and work with outside designers to ensure a continuous flow of new product
   ideas based on developments and trends in consumer preferences and in
   technologies. We believe that our intensive product design and development
   and our emphasis on innovative features distinguish us from our competitors
   worldwide.





Distribution





Our products are sold
   in more than 100 countries around the world from the retail locations of
   others, from our own stores and over the Internet.





United
   States.Our products are sold in the United
   States primarily through department stores, luggage specialty stores and
   national retailers such as JCPenney and Sears. Discount channels, such as
   mass merchants, warehouse clubs and factory outlets, are increasingly
   important to the distribution of our products in the United States. Our
   direct sales force of approximately 55 professionals serve approximately
   10,000 stores in the United States.





We also operate
   approximately 200 retail stores in the United States that distributeSamsonite and American Tourister products designed for these
   stores, as well as excess, discontinued and obsolete products. Our stores
   allow us to efficiently balance inventories and test market new products and
   designs. Our stores also sell a variety of travel-related
   products.





Europe.OurSamsonite products in Europe are sold through
   specialty stores and department stores. Our American Tourister brand
   has been introduced in Europe to balance our retail distribution in each of
   the primary retail channels and to establish a single pan-European brand
   name in the discount channel. We service an estimated 11,000 stores in
   Europe with our direct sales and product demonstration force of
   approximately 100 persons.





We also sell our
   products in certain European markets where we do not have a direct sales
   force, through distributors and agents located in over 20 countries. These
   distributors and agents, as well as those mentioned under Elsewhere in
   the World below, handle various non-luggage products in addition to
   our products. Distribution agreements generally provide for mutual
   exclusivity, whereby distributors do not handle competitors luggage
   products and we do not deal with other distributors or agents in their
   territory.





We also sell our
   products through 11 Samsonite-operated stores located throughout Western
   Europe.





Elsewhere in the
   World.In markets outside the United States and
   Western Europe, we sell our products either directly or through agents and
   distributors or under license. Products sold in these international markets
   are shipped from the United States, Mexico, Western Europe or Asia depending
   upon product type and availability. In some instances, we initially entered
   new markets through third party distributors and subsequently acquired these
   third party distributors as markets have matured. We have long-standing
   licensing arrangements to sell our products in Japan, Australia and Canada.
   We have joint ventures in Singapore, South Korea, India, and China, as well
   as wholly-owned distribution organizations in Hong Kong and Taiwan. We also
   have joint ventures in Argentina, Uruguay and Brazil to distribute
   Samsonite products in those countries as well as other major Latin
   American markets.





Advertising





We commit substantial
   resources to brand advertising programs that promote the features,
   durability and quality of our luggage and travel products under the
   marketing theme Samsonite Worldproof®. In connection with
   launching a new line of our American Tourister products in the second
   half of fiscal 2000, we brought back our very popular gorilla
   advertising theme. We are the only luggage maker to advertise on television
   in the United States and Europe. For the last five fiscal years we have
   invested, on average, in excess of $50 million annually in national and
   co-op advertising programs and related promotional activities.





Manufacturing and
   Sourcing Products





Our global product
   sourcing network consists of 13 Samsonite-operated manufacturing facilities
   and various third party suppliers located principally in the Far East,
   Eastern Europe and the Dominican Republic. By operating our own facilities
   to produce hardside luggage and more complex softside products, we are able
   to control manufacturing quality and reduce lead times and delivery costs.
   Our global sourcing network also enables us to source products from
   countries with lower production costs and favorable currency exchange rates.
   Samsonite-operated manufacturing facilities are located in Belgium, France,
   Hungary, Italy, the Slovak Republic, Mexico, Spain, India, China and the
   United States.





In fiscal year 2000,
   approximately 40% of our revenues from softside luggage products were from
   products manufactured in our own facilities. We purchased the remainder of
   our softside luggage products from third-party vendors in the Far East,
   Eastern Europe and the Dominican Republic. We select different third party
   vendors to take advantage of changes in manufacturing, payment terms and
   shipping costs. We do not rely on any single third party vendor, the loss of
   whom would be material to us.





We manufacture most
   of the hardside luggage products that we sell. Our hardside production
   facilities are located in Denver, Colorado; Oudenaarde, Belgium; Nashik,
   India; Hein-Beaumont, France; Ningbo, China; and Mexico City,
   Mexico.





We maintain a rigorous
   quality control program for goods manufactured at our own plants and at
   third party vendor facilities. A prototype of each new product is put
   through a series of simulation and stress tests. In our manufacturing
   facilities and our Asian sourcing office, we use quality control inspectors,
   engineers and lab technicians to perform inspection and laboratory testing
   on raw materials, parts and finished goods.





Competition





Competition in the
   worldwide luggage industry is very fragmented. The vast majority of our
   competitors have less than 15% of our annual luggage sales. In the United
   States, we compete based on brand name, consumer advertising, product
   innovation, product quality, differentiation, customer service and price. In
   Europe, we compete based on our premium brand name, product design, product
   quality, access to established distribution channels and new product
   offerings.





The manufacture of
   softside luggage is labor intensive but not capital intensive, so that the
   barriers to entry by competitors in this market segment are relatively low.
   We have many competitors in the softside luggage market and in all ends of
   the market. In addition, we compete with various larger retailers, some of
   whom are our customers, who have the ability to purchase private label
   softside luggage directly from manufacturers that operate in low labor cost
   countries. The manufacture of hardside luggage is capital intensive;
   consequently, barriers to entry are relatively high. Nonetheless, we have
   several competitors worldwide in the hardside luggage market.





Customers





Our customers include
   specialty stores featuring luggage products, major department stores that
   carry luggage, retail chain stores, catalog showrooms, mass merchants,
   premium sales (sales direct to business), Internet retailers and
   discounters. We also sell certain products directly to consumers through
   Samsonite-operated retail stores in the United States and Europe. We do not
   depend on any single customer for more than 5% of our consolidated
   revenues.





Trademarks and
   Patents





Trademarks and
   patents are important to us. We are the registered owner of Samsonite,
   American Tourister, Larkand other trademarks. As of January 31, 2000,
   we had approximately 2,131 trademark registrations and 351 trademark
   applications pending in the United States and abroad covering luggage,
   travel equipment, apparel products and retail services. We also own
   approximately 139 United States patents and approximately 521 patents
   (patents of inventions, industrial design registrations and utility models)
   in selected foreign countries. In addition, we have approximately 303 patent
   applications pending worldwide. We pursue a policy of seeking patent
   protection where appropriate for inventions embodied in our products. Our
   patents cover features popularized in our EZ CART, Smart Pocket,
   Easy Turn®, Piggyback, UltravaletandOysterluggage.
   We have also patented our CPX production technology for making luggage
   shells. Although some companies have sought to imitate some of our patented
   products and our trademarks, we have generally been successful in enforcing
   our worldwide intellectual property rights.





Employees and
   Labor Relations





At January 31, 2000,
   we had approximately 7,200 employees worldwide, with approximately 2,000
   employees in the United States and approximately 5,200 employees in other
   countries. In the United States, approximately 500 employees are unionized
   under a contract that is renewed every three years and was most recently
   renewed in April 1999. We employ approximately 2,600 workers in our five
   European manufacturing plants located in Belgium, France, Spain, Italy, the
   Slovak Republic and Hungary. In Europe, union membership varies from country
   to country and is not officially known to Samsonite. It is probable that
   most of our European workers are affiliated with a union. Most European
   union contracts have a one-year duration. We believe our employee and union
   relations are satisfactory.





Forward-Looking
   Statements





Certain statements
   under Business, Managements Discussion and Analysis
   of Financial Condition and Results of Operations, Quantitative
   and Qualitative Disclosures About Market Risk and other places in this
   Annual Report constitute forward-looking statements under the
   Private Securities Litigation Reform Act of 1995. These forward-looking
   statements may be indicated by words such as may,
   will, anticipate, believe,
   estimate, intend, plan,
   expect and similar expressions. Variations on those or similar
   words, or the negative of those words, also may indicate forward-looking
   statements. These forward-looking statements involve known and unknown
   risks, uncertainties and other factors that may cause our actual results,
   performance or achievements to be materially different from any future
   results, performance or achievements expressed or implied by the
   forward-looking statements. These factors include, among others, general
   economic and business conditions, including foreign currency fluctuations;
   industry capacity; changes in consumer preferences; demographic changes;
   competition; changes in methods of distribution and technology; changes in
   political, social and economic conditions and local regulations; general
   levels of economic growth in emerging market countries such as India, China,
   Brazil, Argentina and other Asian and South American countries; the loss of
   significant customers; completion of new product developments within
   anticipated time frames; changes in interest rates; and other factors that
   are beyond our control.





ITEM
   2.    PROPERTIES





The following table
   sets forth certain information relating to our principal properties and
   facilities. All of our manufacturing plants, in our opinion, have been
   adequately maintained and are in good operating condition. We believe that
   our existing facilities have sufficient capacity, together with sourcing
   capacity from third parties, to handle our sales volumes for the foreseeable
   future. The Companys headquarters in Denver share the same location as
   a manufacturing facility.





|Location                      |  | Owned or
   
   Leased |  | Approximate
   
   Facility Size
   
   (thousands of sq. ft.)
|----------------------------- |  | ---------------------- |  | --------------------------------------------------------------
|Denver,
     CO               |  | Owned/Leased           |  | 1,609                                                         
|Tucson,
     AZ               |  | Owned/Leased           |  | 68                                                            
|Jacksonville,
     FL         |  | Leased                 |  | 528                                                           
|Warren,
     RI               |  | Owned                  |  | 490                                                           
|Stratford,
     Canada        |  | Owned                  |  | 212                                                           
|Nogales,
     Mexico          |  | Leased                 |  | 275                                                           
|Mexico City,
     Mexico      |  | Owned                  |  | 278                                                           
|Oudenaarde,
     Belgium      |  | Owned                  |  | 649                                                           
|Ningbo,
     China            |  | Owned                  |  | 100                                                           
|Nashik,
     India            |  | Owned                  |  | 743                                                           
|Torhout,
     Belgium         |  | Owned                  |  | 79                                                            
|Henin-Beaumont,
     France   |  | Owned                  |  | 98                                                            
|Szekszard,
     Hungary       |  | Owned                  |  | 81                                                            
|Tres Cantos,
     Spain       |  | Owned                  |  | 37                                                            
|Saltrio,
     Italy           |  | Leased                 |  | 74                                                            
|Singapore                     |  | Leased                 |  | 13                                                            
|Hong
     Kong                |  | Leased                 |  | 26                                                            
|Seoul, South
     Korea       |  | Leased                 |  | 19                                                            
|Samorin, Slovak
     Republic |  | Owned                  |  | 43                                                            
|Buenos Aires,
     Argentina  |  | Leased                 |  | 19                                                            
|Sao Paulo,
     Brazil        |  | Leased                 |  | 5                                                             




We also maintain
   numerous sales offices, retail outlets and distribution centers in the
   United States and abroad.





ITEM
   3.    LEGAL PROCEEDINGS





Information regarding
   our legal proceedings is contained in Note 15 to our consolidated financial
   statements included elsewhere herein and is incorporated herein by
   reference.





ITEM
   4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY
   HOLDERS





Not
   applicable.





PART
   II





ITEM
   5.    MARKET FOR REGISTRANTS COMMON EQUITY AND
   RELATED STOCKHOLDER MATTERS





Our common stock, par
   value $.01 per share (the Common Stock), is presently traded on
   the Nasdaq National Market (the NNM) under the symbol
   SAMC. The table below sets forth the high and low per share sale
   prices for the Common Stock for fiscal years 1999 and 2000 and through April
   14, 2000 (as reported on the NNM). The closing price of the Common Stock on
   the NNM on April 14, 2000 was $5 1 / 16 per share.





|Fiscal
     1999                        |  | High   |  | Low
|--------------------------------------- |  | ------ |  | ---
|Fiscal quarter
     ended:             
|April
     30, 1998                     |  | 377/8  |  |    
|July
     31, 1998*                     |  | 335/8  |  |    
|October
     31, 1998                   |  | 89/16  |  |    
|January
     31, 1999                   |  | 915/16 |  |    
|
|Fiscal quarter
     ended:             
|April
     30, 1999                     |  | 67/8   |  |    
|July
     31, 1999                      |  | 63/4   |  |    
|October
     31, 1999                   |  | 79/16  |  |    
|January
     31, 2000                   |  | 63/4   |  |    
|
|February 1, 2000 through April 14, 2000 |  | 63/16  |  |    




|* | On June 24, 1998,
     we completed our Recapitalization as described under Item 6, Selected
     Financial Data.
|- | -----------------------------------------------------------------------------------------------------------------




As of April 14, 2000,
   the number of holders of record of our Common Stock was 90.





All holders of shares
   of our Common Stock share ratably in any dividends declared by our Board of
   Directors. Any payment of dividends are at the discretion of our Board of
   Directors and will depend upon, among other things, the Companys
   earnings, financial condition, capital requirements, extent of indebtedness
   and contractual restrictions with respect to the payment of dividends. The
   terms of our indebtedness and the certificate of designation for our
   13 7 / 8 % Senior Redeemable
   Exchangeable Preferred Stock (the Senior Redeemable Preferred
   Stock) currently restrict us from paying dividends on our Common
   Stock.





ITEM
   6.    SELECTED FINANCIAL DATA





The selected
   historical consolidated financial information presented below is derived
   from our audited consolidated financial statements.





The selected
   historical consolidated 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 related notes thereto included
   elsewhere herein.





|                                                                                                                                     |  | Year Ended
     January 31,
|------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------
|
|
|Statement of
     Operations Data                                                                                                    |  |                            
|Net
     Sales                                                                                                                       |  | $675,209                   
|Cost of Goods
     Sold                                                                                                              |  | 414,691                    
|                                                                                                                                     |  |                            
|Gross
     Profit                                                                                                                    |  | 260,518                    
|Selling, General
     and Administrative Expenses                                                                                    |  | 203,701                    
|Amortization of
     Intangible Assets                                                                                               |  | 63,824                     
|Provision for
     Restructuring Operations                                                                                          |  | 2,369                      
|                                                                                                                                     |  |                            
|Operating Income
     (Loss)                                                                                                         |  | (9,376                     
|Interest
     Income                                                                                                                 |  | 4,709                      
|Interest Expense
     and Amortization of Debt Issue Costs
   
        and Premium                                                   |  | 39,974                     
|Other Income
     (Expense)Net                                                                                                      |  | 3,967                      
|Income Tax
     Expense                                                                                                              |  | 9,095                      
|Minority Interest
     in Earnings of Subsidiaries                                                                                   |  | (1,385                     
|                                                                                                                                     |  |                            
|Income (Loss) from
     Continuing Operations                                                                                        |  | (51,154                    
|Income (Loss) from
     Operations Discontinued and Sold
   
        and Extraordinary Items                                         |  | (10,293                    
|                                                                                                                                     |  |                            
|Net Income
     (Loss)                                                                                                               |  | (61,447                    
|Senior Redeemable
     Preferred Stock Dividends and
   
        Accretion of Senior Redeemable Preferred Stock
   
        Discount |  |                           
|                                                                                                                                     |  |                            
|Net Income (Loss)
     to Common Stockholders                                                                                        |  | $(61,447                   
|                                                                                                                                     |  |                            
|Income (Loss) per
     Common ShareBasic:                                                                                           |  |                            
|Net
     Income (Loss) from Continuing Operations
   

                
         Before Extraordinary Item                           |  | $    (3.24                 
|Net
     Income (Loss)                                                                                                               |  | $    (3.89                 
|Income (Loss) per
     Common ShareAssuming Dilution:                                                                               |  |                            
|Net
     Income (Loss) from Continuing Operations
   

                
         Before Extraordinary Item                           |  | $    (3.24                 
|Net
     Income (Loss)                                                                                                               |  | $    (3.89                 
|Balance Sheet
     Data (as of end of period)                                                                                        |  |                            
|Property, Plant and
     Equipment, Net                                                                                              |  | $140,912                   
|Total
     Assets                                                                                                                    |  | $607,443                   
|Long-Term
     Obligations (Including Current
   
        Installments)                                                              |  | $310,959                   
|Senior Redeemable
     Preferred Stock                                                                                               |  |                           
|Stockholders
     Equity (Deficit)                                                                                                  |  | $  25,116                  




Rights
   Offering





On November 5, 1999,
   the Company completed a rights offering to its stockholders, under which the
   Company distributed, on a pro rata basis to all of its common stockholders
   of record as of September 30, 1999, transferable rights to purchase
   additional shares of common stock at $6.00 per share.





The Company announced
   the rights offering for up to $75 million on April 7, 1999. Prior to April
   7, 1999, Apollo Investment L.P. (Apollo) beneficially owned
   approximately 34% of the Companys outstanding common stock, of which
   approximately one-half was held by Lion Advisors, L.P., an affiliate of
   Apollo, in a managed account under the terms of an investment management
   agreement with Artemis America Partnership (Artemis). At that
   time, Apollo agreed to make a bridge investment equal to the aggregate
   subscription price of rights distributable to them in the rights offering
   and to backstop the rights offering by purchasing a portion of
   the shares not subscribed for by other stockholders, up to a maximum
   potential total investment in connection with the rights offering of $37.5
   million. Apollo made its bridge investment in April 1999 of $25.4 million by
   purchasing 1,000 shares of Series Z Convertible Preferred Stock
   (Series Z Preferred Stock) which was convertible into common
   stock at the rate of $6.00 per common share for a total of 4,235,000 shares.
   Part of the proceeds from the bridge investment was used to pay the cash
   premium for an insurance policy covering various lawsuits filed between
   March 13, 1998 and March 9, 1999 against the Company, related parties and
   former directors, and to pay certain costs incurred to defend these
   lawsuits. (See Note 15 to our Consolidated Financial Statements included
   elsewhere herein.) In consideration of Apollos agreement to make a
   bridge investment and to back-stop the rights offering, the Company agreed
   to pay Apollo a fee of $1.0 million.





On July 13, 1999,
   Apollo raised the amount of its back-stop commitment by $12.5 million,
   increasing Apollos maximum potential investment to $50.0 million, and,
   in a separate agreement, Artemis agreed to make up to an additional $25.0
   million investment in the Company by purchasing from Apollo, at
   Apollos cost, one-half of the shares that Apollo purchased in its
   bridge investment and one-half of any shares that Apollo was obligated to
   purchase under its back-stop commitment.





As a result of the
   rights offering, shareholders other than Apollo and Artemis exercised rights
   to purchase 846,858 shares of Samsonites common stock for an aggregate
   of $5.1 million. Additionally, Apollo and Artemis made an investment
   totaling $24.6 million under the back-stop obligation by purchasing an
   additional aggregate of approximately 968 shares of Series Z Preferred Stock
   which was convertible into the Companys common stock at a rate of
   $6.00 per common share for a total of 4,098,333 shares. Total gross proceeds
   from the rights offering, including proceeds from the bridge investment and
   back-stop arrangement and from the shareholders other than Apollo and
   Artemis, were $55.1 million before expenses of the offering.





During fiscal 2000,
   all of the shares of Series Z Preferred Stock were converted into a total of
   8,333,333 shares of common stock.





Recapitalization





On June 24, 1998, the
   Company completed a recapitalization (the Recapitalization). The
   Recapitalization involved the following: (1) the sale of 175,000 Units
   consisting of 175,000 shares of Senior Redeemable Preferred Stock with a
   stated amount of $175 million, and warrants to purchase 1,959,000 shares of
   Common Stock at an exercise price of $13.02 per share; (2) the sale of $350
   million aggregate principal amount of the Companys 10 3 / 4 % senior subordinated
   notes due 2008; (3) the repurchase pursuant to a tender offer of 10.5
   million shares of Common Stock at a purchase price of $40 per share (or $420
   million in the aggregate); (4) the refinancing of certain indebtedness
   existing at that time; and (5) entering into the Companys current bank
   credit facility.





ITEM
   7.    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 data and the consolidated financial statements of the Company and
   notes thereto commencing on page F-1. The Companys fiscal year ends on
   January 31. References to a fiscal year denote the calendar year in which
   the fiscal year ended; for example, fiscal 2000 refers to the 12
   months ended January 31, 2000. The Companys continuing operations
   consist of a single business segment, the manufacture and sale of luggage
   and luggage related products.





Results of
   Operations





The Company analyzes
   its net sales and operations by the following categories: (i)
   European operations which include its European sales,
   manufacturing and distribution operations whose reporting currency is the
   Belgian franc; (ii) the Americas operations which include
   wholesale and retail sales, manufacturing and distribution operations in the
   United States and corporate headquarters, and Other Americas
   operations which includes operations in Canada and Latin America; (iii)
   Asian operations which include the sales, manufacturing and
   distribution operations in India, China, Singapore, South Korea, Hong Kong
   and Taiwan; and (iv) licensing operations.





Fiscal 2000
   Compared to Fiscal 1999





General.Results of European operations were translated
   from Belgian francs to U.S. dollars in fiscal 2000 and fiscal 1999 at
   average rates of approximately 37.90 and 36.32 francs to the dollar,
   respectively. The decrease in the value of the Belgian franc of 4.2%
   resulted in decreases in European reported sales, cost of sales, selling,
   general and administrative expenses, and operating earnings in fiscal 2000
   compared to fiscal 1999. The most significant effects from the difference in
   exchange rates from last year to the current year are noted in the following
   analysis and are referred to as an exchange rate difference. The
   Company enters into forward foreign exchange contracts and option contracts
   to reduce its economic exposure to fluctuations in currency exchange rates
   for the Belgian franc and other foreign currencies. Such instruments are
   marked to market at the end of each accounting period; realized and
   unrealized gains and losses are recorded in Other Income (Expense)-Net.
   During fiscal 2000, the Company had net gains from such instruments of $5.7
   million. Realized gains on contracts closed during fiscal 2000 were $4.3
   million. During fiscal 1999, the Company had net gains on such instruments
   of $0.2 million. Realized gains on contracts closed during fiscal 1999 were
   $1.4 million. The Company estimates the negative impact on operating income
   from the year-to-year strengthening of the U.S. dollar versus the Belgian
   franc to be approximately $2.1 million and $0.5 million in fiscal 2000 and
   1999, respectively. Since December 31, 1999, the Belgian franc has continued
   to decline in value versus the U.S. dollar. Declining European currencies
   have an adverse effect on the Companys reported sales and can have an
   adverse effect on operating income because the Company may not entirely
   offset exposure to currency losses through the aforementioned efforts to
   reduce economic exposure to such currency fluctuations.





Net
   Sales.Consolidated net sales increased from
   $697.4 million in fiscal 1999 to $767.7 million in fiscal 2000, an increase
   of $70.3 million, or 10.1%. Fiscal 2000 sales were adversely affected by the
   decrease in the value of the Belgian franc compared to the U.S. dollar in
   fiscal 2000. Without the effect of the exchange rate difference, fiscal 2000
   sales would have increased by $84.3 million or approximately
   12.1%.





On a U.S. dollar
   basis, sales from European operations increased from $305.0 million in
   fiscal 1999 to $323.2 million in fiscal 2000, an increase of $18.2 million,
   or 6.0%. Expressed in the local European reporting currency (Belgian
   francs), fiscal 2000 sales increased by 10.6%, or the U.S. constant dollar
   equivalent of $32.2 million, from fiscal 1999; however, the local currency
   increase was partially offset by the adverse effect of a $14.0 million
   exchange rate difference. Softside product sales continue to make up an
   increasingly larger percentage of total luggage sales in European
   operations, comprising 51% of total sales from European operations in fiscal
   2000. Contributing to the 19% local currency growth in revenues from
   softside products
 compared to the prior year was growth in sales of the existingSpark
   line of products, sales from the new Accentline, and a 40% increase
   in sales of business and computer cases. Sales of both hardside and
   softsideAmerican Tourister branded products, recently introduced in
   the European hyper-market, also contributed to the strong
   performance of the European division. Local currency sales of hardside
   luggage were approximately 1% lower compared to the prior year. Increases in
   clothing and footwear sales of $4.2 million and $1.4 million, respectively,
   contributed to the sales growth. Clothing and footwear sales were $4.2
   million and $14.4 million, respectively, during fiscal 2000.





Sales from the
   Americas operations increased from $353.8 million in fiscal 1999 to $393.6
   million in fiscal 2000, an increase of $39.8 million or 11.2%. The increase
   was largely due to an increase in U.S. Wholesale sales of $32.8 million, an
   increase in U.S. retail sales of $3.9 million and an increase in sales of
   Other Americas operations of $3.1 million.





| |  | U.S. Wholesale
     revenues of $212.4 million were $32.8 million higher than prior year, an
     increase of 18.3%. The increase in U.S. Wholesale revenues was due to
     improvements resulting from management strategies implemented during
     fiscal 1999 and 2000 to turnaround this segment of the business. As a
     result of such actions, we have seen increased consumer acceptance of more
     competitive products offered by the Company. Improved marketing strategies
     have resulted in better sell-through of our products and have resulted in
     fewer returns compared to the prior year. Sales returns and allowances
     during fiscal 2000 declined by $20.7 million compared to the prior year.
     Strong increases in sales in the non-traditional and premium channels of
     $40.5 million were offset by decreases in sales in the traditional channel
     of $7.7 million. Within the non-traditional channel, increases in sales
     are due primarily to the introduction of new American Tourister
     products and higher sales of exclusive label products. Although our action
     plans to improve customer relations, service levels and our cost structure
     appear to be working and have resulted in stronger operational results,
     substantial efforts continue to be made to further improve the sales and
     the cost structure of the U.S. Wholesale business during the next fiscal
     year.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  | U.S. retail sales
     increased from $128.6 million in the prior year to $132.5 million in the
     current year, an increase of $3.9 million. The increase in sales is due to
     the effect of a full year of operations for the net increase of six stores
     during fiscal 1999 and increased sales from a net increase of eight stores
     opened during fiscal 2000. Comparable store sales declined by $3.3 million
     or approximately 3% from fiscal 1999 due to reduced outlet mall consumer
     traffic and increased sales of discontinued and obsolete products at a
     discount during fiscal 2000. The Companys business strategy does not
     contemplate expansion of the number of Company operated retail
     stores.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  | Sales from Other
     Americas operations, including Mexico, Canada, Brazil, Argentina and
     Uruguay, were increased from the prior year by $3.1 million, to $48.6
     million in fiscal 2000. The increase in sales from Other Americas
     operations is primarily due to a full year of operations for joint venture
     operations acquired in Argentina and Uruguay during fiscal 1999 and
     increases in Canadas sales.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Sales from Asian
   operations increased from $22.9 million in fiscal 1999 to $35.4 million in
   fiscal 2000, an increase of $12.5 million or 55%. Sales from Asian
   operations increased due primarily to improved economies in the region and
   increased market share in certain countries.





Revenues from U.S.
   licensing declined $0.2 million compared to revenues in the prior year due
   primarily to the continued decline in revenues from aging non-luggageMcGregor brands, which declined $0.4 million; however, SamsoniteandAmerican Tourister label licensing revenues increased $0.2
   million from the prior year. The Company is continuing its efforts to expand
   licensing revenues from its core luggage brands as a low cost strategy to
   increase operating income.





Gross
   Profit.Consolidated gross profit for fiscal 2000
   increased from fiscal 1999 by $41.1 million. Gross profit as a percentage of
   sales (gross profit margin) increased by 1.6 percentage points,
   from 40.8% in fiscal 1999 to 42.4% in fiscal 2000.





Gross profit margin from
   European operations increased by 2.3 percentage points, from 40.2% in fiscal
   1999 to 42.5% in fiscal 2000. The improvement is due to selective price
   increases effective in the European markets beginning in fiscal 2000 and an
   improvement in margins on softside products due to lower product
   costs.





Gross profit margin
   for the Americas operations increased 1.6 percentage points from 38.6% in
   fiscal 1999 to 40.2% in fiscal 2000. U.S. Wholesale gross profit margin
   increased from 30.5% in fiscal 1999 to 35.0% in fiscal 2000, due primarily
   to significantly lower period manufacturing costs, lower plant production
   variances, fewer sales returns and allowances and increased sales volumes.
   Gross profit margins for U.S. Retail decreased from 52.1% in the prior year
   to 51.0% in the current year due primarily to a higher percentage of
   discontinued and obsolete product sold at discounts through the U.S. Retail
   division and lower comparable store sales. Part of the Companys
   strategy to reduce excess inventories in the U.S. is to sell such product
   through its retail stores. Despite recessionary economic conditions
   beginning in fiscal 1999 and continuing into fiscal 2000 throughout many
   countries in Latin America, gross profit margins in the Other Americas
   segment increased from 32.0% in fiscal 1999 to 34.9% in fiscal 2000 due to a
   lower cost structure compared to the prior year.





Gross margins for the
   Asian operations improved from 44.2% in the prior year to 45.6% in fiscal
   2000 due to higher sales volume of products with lower product
   costs.





Selling, General
   and Administrative Expenses
   (SG&A).Consolidated SG&A
   decreased by $2.1 million from fiscal 1999 to fiscal 2000. As a percent of
   sales, SG&A was 34.1% in fiscal 2000 and 37.8% in fiscal
   1999.





SG&A for European
   operations increased by $12.0 million from fiscal 1999 to fiscal 2000. The
   exchange rate difference caused SG&A to decrease by $4.1 million. The
   net increase of $16.1 million is due primarily to higher advertising costs
   in fiscal 2000 and increased variable selling expenses to support higher
   sales levels in fiscal 2000. Included in SG&A in fiscal 2000 is a
   non-recurring expense of $1.4 million for the repayment of social subsidies
   received during the period 1993 through 1996 mandated by Belgian and French
   governments. The repayment was imposed during the fourth quarter and affects
   all companies who received subsidies during the three year time period. As a
   percent of sales, Europes SG&A was 27.5% in 2000 compared to 25.2%
   in 1999.





SG&A for the
   Americas operations, including worldwide corporate headquarters, decreased
   by $14.5 million in fiscal 2000 compared to fiscal 1999. SG&A related to
   Corporate and U.S. Wholesale operations, combined, decreased by $19.4
   million, from $103.4 million in fiscal 1999 to $84.0 million in fiscal 2000.
   This decrease is due primarily to expenses incurred in fiscal 1999 totaling
   $9.1 million associated with the 1998 recapitalization, and lower costs for
   dealer and national advertising, warranty and selling expenses in the U.S.
   Wholesale business compared to the prior year. SG&A related to U.S.
   retail operations increased by $4.6 million because of an increase in the
   number of stores open and increased sales volume. As a percent of sales,
   retail SG&A increased from 44.8% in fiscal 1999 to 46.9% in fiscal 2000.
   SG&A for Other Americas operations increased by $0.3 million primarily
   because of a full year of operations for joint ventures in Argentina and
   Uruguay acquired during fiscal 1999.





SG&A for Asian
   operations increased by $1.3 million from fiscal 1999. The increase was
   primarily to support increased sales levels in fiscal 2000. As a percent of
   sales, Asias SG&A was 30.7% in fiscal 2000 compared to 41.0% in
   fiscal 1999.





Licensing SG&A
   decreased by $0.9 million compared to the prior year due to the elimination
   of an outside service contract.





Amortization of
   Intangible Assets.Amortization of intangible
   assets increased from $5.6 million in fiscal 1999 to $5.7 million in fiscal
   2000. The $0.1 million increase is due primarily to a full year of
   amortization expense for goodwill recorded in connection with the purchases
   of foreign distributorships in Argentina and Uruguay in fiscal
   1999.





Provision for
   Restructuring Operations.The provision for
   restructuring operations in fiscal 1999 results primarily from the
   restructuring of the U.S. Wholesale and Torhout, Belgium manufacturing
   operations. There was no restructuring provision during fiscal
   2000.





Operating
   Income.Operating income increased from $8.2
   million in fiscal 1999 to $57.9 million in fiscal 2000, an increase of $49.7
   million. This is a result of increased gross profit of $41.1 million,
   decreased SG&A of $2.1 million and decreased restructuring provision of
   $6.6 million, net of a small increase in amortization of
   intangibles.





Interest
   Income.Interest income decreased from the prior
   year by $0.4 million. Interest income in fiscal 2000 results primarily from
   interest received from the temporary investment of excess cash balances.
   Interest income in fiscal 1999 includes interest received from the temporary
   investment of funds from proceeds of the financing component of the 1998
   recapitalization until the 1998 recapitalization was completed and interest
   income received on a refund of state income taxes, in addition to interest
   received from temporary investments of excess cash balances.





Interest Expense
   and Amortization of Debt Issue Costs and
   Premium.Interest expense and amortization of
   debt issue costs increased from $40.0 million in fiscal 1999 to $52.3
   million in fiscal 2000. The increase was caused primarily by a full year of
   interest expense related to debt incurred on June 24, 1998 to finance the
   1998 recapitalization. Interest expense includes $2.1 million in
   amortization of debt issuance costs. Over 70% of the Companys debt as
   of January 31, 2000 was in fixed rate instruments.





Other Income
   (Expense)Net.See Note 16 to the
   consolidated financial statements included elsewhere herein for a
   comparative analysis of the components of Other Income
   (Expense)Net.





The Company has
   entered into certain forward exchange contracts to reduce its economic
   exposure to changes in exchange rates. The Company estimates the reduction
   in operating income from the strengthening of the U.S. dollar versus the
   Belgian franc from the same period in the prior year to be approximately
   $2.1 million and $0.5 million for fiscal 2000 and 1999, respectively. Other
   Income (Expense)Net for fiscal 2000 includes gains from forward
   exchange contracts of $5.7 million. Realized gains on contracts closed
   during fiscal 2000 were $4.3 million. In fiscal 1999, such transactions
   resulted in gains of $0.2 million. Realized gains on contracts closed during
   fiscal 1999 were $1.4 million.





Other Income
   (Expense)Net includes income of $3.5 million resulting from the
   adjustment to an accrual for the settlement of a contingent liability with
   respect to interest which had been previously accrued on certain old notes.
   Subsequent to fiscal 2000, the Company executed the settlement of the
   contingent liability for less than the amount previously accrued. (See Note
   15 to the consolidated financial statements included elsewhere herein.)
   Additionally, other expenses of $23.2 million were recorded in fiscal 1999
   for accrued costs related to shareholder litigation (see Note 15 to the
   consolidated financial statements included elsewhere herein). Other expense
   of $0.7 million was recorded in fiscal 2000 compared to $1.9 million in
   fiscal 1999 for equity in loss of affiliates related to Samsonites
   investment in the China joint venture. During fiscal 2000, the Company
   recorded a loss on disposition of assets held for sale and fixed assets of
   $0.2 million compared to a gain of $3.2 million in fiscal 1999. The prior
   year gain was due primarily to a gain on the sale of the Companys
   Murfreesboro, Tennessee building which had been previously leased to third
   parties. Transactional exchange losses increased $1.5 million in fiscal 2000
   compared to the prior year and other miscellaneous expenses decreased $0.6
   million from fiscal 1999.





Income
   Taxes.Income tax expense decreased from $26.8
   million in fiscal 1999 to $12.6 million in fiscal 2000. The reduction in
   income tax expense was primarily caused by the provision for taxes in the
   prior year to record valuation allowances for U.S. deferred tax assets.
   Valuation allowances were provided for deferred tax assets in fiscal 1999
   and 2000 based on an assessment of the likelihood of their realization in
   view of (i) the U.S. current year net operating loss for book and tax
   purposes, (ii) expiration dates for tax net operating losses incurred in
   prior years, and (iii) the Companys forecasts of future taxable income
   taking into account the
 increased level of ongoing interest expense as a result of the 1998
   recapitalization. The difference between expected income tax expense,
   computed by applying the U.S. statutory rate to income from continuing
   operations, and income tax expense recognized, results primarily because of
   (i) foreign income tax expense provided on foreign earnings, (ii) the effect
   of providing no tax benefit for U.S. operating losses, and (iii) state and
   local income taxes. See Note 12 to the consolidated financial statements
   included elsewhere herein for further analysis of income tax
   expense.





Extraordinary Gain
   (Loss).During fiscal 2000, the Company
   repurchased and retired $12.0 million principal amount of its 10 3 / 4 % Senior Subordinated
   Notes (the 10 3 / 4 % Notes). The
   difference between the principal amount of the 10 3 / 4 % Notes and the
   amount at which they were repurchased by the Company was recorded as a gain,
   net of deferred financing costs, and classified as an extraordinary item.
   (See Note 9 to the consolidated financial statements included elsewhere
   herein.)





During fiscal 1999
   the Company completed a tender offer for its 11 1 / 8 % Series B Senior
   Subordinated Notes (the Series B Notes). The Company retired
   $52.3 million principal amount of the Series B Notes and paid redemption
   premiums and other related expenses totaling approximately $8.5 million.
   These costs along with $1.5 million of deferred financing costs were charged
   to expense and classified as an extraordinary item, net of tax effects,
   during fiscal 1999. On June 24, 1998, the Company completed a
   recapitalization. In connection with the 1998 recapitalization, deferred
   financing costs related to the refinanced senior credit facility of $0.4
   million were charged to expense and classified as an extraordinary item, net
   of tax effects. See Note 2 to the consolidated financial statements included
   elsewhere herein.





Net
   Loss.The Company had a net loss in fiscal 2000
   of $1.8 million compared to a net loss in fiscal 1999 of $88.8 million. The
   $87.0 million decrease in the net loss from the prior year is the result of
   the increases in operating income and other income (expense)net, and
   the reductions in income tax expense and extraordinary items, partially
   offset by the reduction in interest income, and the increases in interest
   expense and minority interest.





Senior Redeemable
   Preferred Stock Dividends and Accretion of Senior Redeemable Preferred Stock
   Discount.This item represents the accrual of
   cumulative dividends on Senior Redeemable Senior Preferred Stock issued in
   connection with the 1998 recapitalization and accretion of the discount over
   the twelve-year term of the Senior Redeemable Preferred Stock.





Net Loss to Common
   Stockholders.This amount represents Net Loss
   reduced for dividends payable and the accretion of discount on the Senior
   Redeemable Preferred Stock and is the amount used to calculate Net Loss per
   Common Share.





Fiscal 1999
   Compared to Fiscal 1998





General.Results of European operations were translated
   from Belgian francs to U.S. dollars in fiscal 1999 and fiscal 1998 at
   average rates of approximately 36.32 and 35.67 francs to the U.S. dollar,
   respectively. This decrease in the value of the Belgian franc of 1.8%
   resulted in decreases in European reported sales, cost of sales and other
   expenses in fiscal 1999 compared to fiscal 1998. The most significant
   effects from the difference in exchange rates from last year to the current
   year are noted in the following analysis and are referred to as an
   exchange rate difference. The Company enters into forward
   foreign exchange contracts and option contracts to reduce its economic
   exposure on translated earnings from foreign operations and/or royalty
   agreements to fluctuations in currency exchange rates for the Belgian franc
   and other foreign currencies. Such instruments are marked to market at the
   end of each accounting period; realized and unrealized gains and losses are
   recorded in Other Income (Expense)Net. During fiscal 1999, the Company
   had net gains from such instruments of $0.2 million. Realized gains on
   contracts closed during fiscal 1999 were $1.4 million. During fiscal 1998,
   the Company had net gains on such instruments of $6.5 million. The Company
   estimates the reduction in operating income from the year-to-year
   strengthening of the U.S. dollar versus the Belgian franc to be
   approximately $0.5 million and $5.6 million in fiscal 1999 and 1998,
   respectively.





Net
   Sales.Consolidated net sales decreased from
   $736.9 million in fiscal 1998 to $697.4 million in fiscal 1999, a decrease
   of $39.5 million. Fiscal 1999 sales were adversely affected by the decrease
   in the value of the Belgian franc compared to the U.S. dollar in fiscal
   1999. Without the effect of the exchange rate difference, fiscal 1999 sales
   would have decreased by $33.9 million or approximately 4.6%.





On a U.S. dollar
   basis, sales from European operations increased from $277.2 million in
   fiscal 1998 to $305.0 million in fiscal 1999, an increase of $27.8 million.
   Expressed in the local European reporting currency (Belgian francs), fiscal
   1998 sales increased by 12.1%, or the U.S. constant dollar equivalent of
   $33.4 million, from fiscal 1998; however, the local currency increase was
   partially offset by a $5.6 million exchange rate difference. Sales of
   hardside products were 7.8% above the prior year due to the successful
   introduction of new product lines, growth in sales of American Touristerproducts, and higher business case sales. Sales of softside products
   were 12.8% above the prior year because of strong sales of new products,
   excellent growth in sales of business cases and growth of lower priced
   luggage products. Sales in most European countries showed significant
   improvement over the prior year. New product lines which contributed to
   sales growth in fiscal 1999 include Spark, Base Hits, andAccent softside products andOyster II hardside.





Sales from the
   Americas operations decreased from $419.3 million in fiscal 1998 to $353.8
   million in fiscal 1999, a decrease of $65.5 million or 15.6%. The decrease
   was largely due to a decline in U.S. Wholesale sales of $90.1 million,
   offset by an increase in U.S. retail sales of $19.7 million from the prior
   year and an increase in sales from Other Americas of $4.9
   million.





| |  | U.S. Wholesale
     revenues of $179.6 million were less than the prior year of $269.7 million
     by $90.1 million, or 33.4%. U.S. Wholesale sales decreased due to a number
     of factors affecting the U.S. luggage industry in general, including
     numerous discount luggage promotions, industry-wide excess inventory
     levels at retail, a poor Christmas selling season for luggage, and to a
     lesser extent, economic conditions in Asia and Latin America affecting
     tourism to the U.S. An additional factor in declining sales is increased
     competition from luggage companies which are offering products which are
     similar to the Companys products in terms of style, features and
     durability of construction. U.S. Wholesale sales were also negatively
     impacted by a computer conversion problem which virtually halted shipments
     to customers during the first 20 days of July 1998 and slowed shipments
     through the remainder of July 1998 and part of August 1998. Conversion of
     the U.S. distribution system was the last phase of the project to upgrade
     computer systems in the U.S., which included the installation of the new
     financial, manufacturing and distribution software. The computer
     conversion problems were largely resolved during the third quarter of the
     fiscal year such that shipping and invoicing functions were
     restored.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  | U.S. retail sales
     increased from $108.9 million in the prior year to $128.6 million in the
     current year due to the effect of a full year of operations for the net
     increase of 40 stores during fiscal 1998 and a net increase of six stores
     opened during fiscal 1999. Comparable store sales decreased by $0.3
     million or less than 1% from fiscal 1998.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| |  | Sales from Other
     Americas operations, including Mexico, Canada, Brazil, Argentina and
     Uruguay, were increased from the prior year by $4.9 million, from $40.7
     million in fiscal 1998 to $45.6 million in fiscal 1999. The increase in
     sales from Other Americas operations is due to new joint venture
     operations in Argentina and Uruguay beginning in fiscal 1999, a full year
     of sales for joint venture operations established in fiscal 1998 in
     Brazil, and increases in Canadas sales.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




Sales from Asian
   operations increased from $21.9 million in fiscal 1998 to $22.9 million in
   fiscal 1999, an increase of $1.0 million, primarily due to a full year of
   operations in India, Hong Kong and Korea which were established in fiscal
   1998, offset by declines in revenues from other Asian countries due to poor
   economic conditions in Asia and the effect of weakened Asian currencies on
   sales translated to U.S. dollars.





Revenues from U.S.
   licensing declined $2.8 million compared to revenues in the prior year due
   to two large license sale transactions in the prior year which totaled $2.2
   million and the continued decline in revenues from
 aging non-luggage McGregor brands. Samsonite and American
   Touristerlabel licensing revenues increased compared to prior year by
   $0.8 million because of increased marketing efforts to license the
   Samsonite brand.





Gross
   Profit.Consolidated gross profit for fiscal 1999
   decreased from fiscal 1998 by $28.2 million. Gross margin decreased by 1.6
   percentage points, from 42.4% in fiscal 1998 to 40.8% in fiscal 1999.
   Because of the Companys excess inventory position described elsewhere
   herein, the Company may experience lower than normal gross profit margins on
   the sale of excess inventory.





Gross margins from
   European operations increased by 0.3 percentage points, from 39.9% in fiscal
   1998 to 40.2% in fiscal 1999. The improvement is due to stronger sales of
   higher margin products.





Gross margins for the
   Americas operations decreased 4.1 percentage points from 42.7% in fiscal
   1998 to 38.6% in fiscal 1999. This was caused primarily by the decrease in
   U.S. Wholesale margins from 43.1% to 30.5%, because of lower sales volume,
   increased sales allowances, increased sales of discontinued and obsolete
   goods, and higher in-bound freight costs offset by lower plant production
   variances, period manufacturing and global sourcing costs. Gross margins for
   U.S. Retail improved from 48.9% in the prior year to 52.1% in the current
   year due primarily to the change in product mix sold during fiscal
   1999.





Selling, General
   and Administrative Expenses
   (SG&A).Consolidated SG&A
   increased by $29.6 million from fiscal 1998 to fiscal 1999. As a percent of
   sales, SG&A was 37.8% in fiscal 1999 and 31.8% in fiscal
   1998.





SG&A for European
   operations increased by $5.9 million from fiscal 1998 to fiscal 1999. The
   exchange rate difference caused SG&A to decrease by $1.4 million. The
   remaining increase of $7.3 million was primarily to support increased sales
   levels in fiscal 1999. As a percent of sales, Europes SG&A was
   25.2% in 1999 compared to 25.6% in 1998.





SG&A for the
   Americas operations, including worldwide corporate headquarters, increased
   by $22.2 million in fiscal 1999 compared to fiscal 1998. SG&A related to
   U.S. Wholesale operations decreased by $2.7 million, from $85.2 million in
   fiscal 1998 to $82.5 million in fiscal 1999. As a percent of sales, U.S.
   Wholesale SG&A was 45.9% in the current year compared to 31.6% in the
   prior year primarily due to higher expenses incurred for warehousing,
   national advertising and warranty in 1999 and lower sales volume in fiscal
   1999. SG&A related to U.S. retail operations increased by $11.3 million
   because of an increase in the number of stores open and increased sales
   volume. As a percent of sales, retail SG&A increased from 42.6% in
   fiscal 1998 to 44.8% in fiscal 1999. SG&A for Other Americas operations
   increased by $2.4 million primarily because of new joint venture operations
   in Argentina and Uruguay beginning in fiscal 1999 and a full year of
   operations since the formation of the Brazilian joint venture in 1998.
   Corporate SG&A increased by $11.2 million from the prior year due
   primarily to $9.1 million in expenses associated with the Recapitalization
   including expenses associated with adjustments to employee stock options,
   increases in legal costs, and expenses associated with assessment and
   implementation of Year 2000 readiness strategies.





SG&A for Asian
   operations, including India, increased by $1.5 million from fiscal 1998 due
   to a full year of operations for new joint venture subsidiaries in Hong Kong
   and Korea and a full year of operations for India.





Amortization of
   Intangible Assets.Amortization of intangible
   assets decreased from $7.1 million in fiscal 1998 to $5.6 million in fiscal
   1999 due primarily toSamsonite licenses which became fully amortized
   in fiscal 1998 and McGregor licenses which became fully amortized in
   fiscal 1999.





Provision for
   Restructuring Operations.The provision for
   restructuring operations in fiscal 1999 results primarily from the
   restructuring of the U.S. Wholesale and Torhout, Belgium manufacturing
   operations. The U.S. Wholesale restructuring provision of $5.6 million
   recorded in the second quarter of fiscal 1999 is primarily related to
   termination and severance costs for the elimination of approximately 227
   positions and costs related to the disposal of molding and other equipment
   representing excess capacity. The Torhout, Belgium restructuring
 provision of $2.6 million is primarily related to termination and severance
   costs for the elimination of approximately 111 positions. The fiscal 1999
   provisions are comprised of estimated cash expenditures of $6.0 million and
   estimated non-cash charges of $2.2 million. During the fourth quarter of
   fiscal 1999, certain excess restructuring reserves of $1.6 million were
   reversed, including $0.5 million related to the fiscal 1997 reserve, and
   $1.1 million related to the fiscal 1999 U.S. Wholesale restructuring
   reserve. In fiscal 1998, the Company recorded a $3.6 million restructuring
   provision and reduced the restructuring provision by $1.7 million for excess
   accruals related to the fiscal 1997 restructuring. The fiscal 1998 provision
   consists primarily of costs associated with involuntary employee
   terminations and is comprised of estimated cash expenditures of $3.3 million
   and estimated non-cash charges of $0.3 million. The reversals of excess
   reserves in fiscal 1999 and 1998 was necessary because certain expenses
   contemplated in the restructurings did not materialize.





Operating
   Income.Operating income decreased from $69.3
   million in fiscal 1998 to $8.2 million in fiscal 1999. This is a result of
   decreased gross profit of $28.2 million, increased SG&A of $29.6 million
   and an increased restructuring provision of $4.8 million, net of a decrease
   in amortization of intangibles of $1.5 million.





Interest
   Income.Interest income decreased from the prior
   year by $0.1 million. Interest income in fiscal 1999 includes interest
   received from the temporary investment of funds from proceeds of the
   financing component of the 1998 recapitalization until the 1998
   recapitalization was completed, interest income received on a refund of
   state income taxes, and interest income from temporary investments. Interest
   income in fiscal 1998 includes nonrecurring interest income of $1.4 million
   received upon recovery of a loan to the settlement trust created as a result
   of the 1993 reorganization.





Interest Expense
   and Amortization of Debt Issue Costs and
   Premium.Interest expense and amortization of
   debt issue costs increased from $19.9 million in fiscal 1998 to $40.0
   million in fiscal 1999. The increase was caused primarily by an increase in
   interest expense related to debt incurred on June 24, 1998 to finance the
   1998 recapitalization.





Other Income
   (Expense)Net.See Note 16 to the
   consolidated financial statements included elsewhere herein for a
   comparative analysis of the components of Other Income (Expense)Net.
   The Company has entered into certain forward exchange contracts to reduce
   its economic exposure to changes in exchange rates. The Company estimates
   the reduction in operating income from the strengthening of the U.S. dollar
   versus the Belgian franc from the same period in the prior year to be
   approximately $0.5 million and $5.6 million for fiscal 1999 and 1998,
   respectively. Other Income (Expense)Net for fiscal 1999 includes gains
   from forward exchange contracts of $0.2 million, including a $1.4 million
   gain which was realized. In fiscal 1998, such transactions resulted in gains
   of $6.5 million.





Other Income
   (Expense)Net also includes $23.2 million expense in fiscal 1999 and
   $24.9 million income in fiscal 1998 for favorable adjustments to accruals
   and allowances related to previous operations and to an accrual for taxes
   recorded in connection with the 1993 reorganization and accrued costs
   related to shareholder litigation (see Note 15 to the consolidated financial
   statements included elsewhere herein). Other expense of $1.8 million was
   recorded in fiscal 1999 compared to $0.5 million in fiscal 1998 for equity
   in loss of affiliates related to Samsonites investment in the China
   joint venture. Gain (loss) on disposition of assets held for sale and fixed
   assets, net improved from a loss of $0.4 million in fiscal 1998 compared to
   a gain of $3.2 million in fiscal 1999 due primarily to a gain on the sale of
   the Companys Murfreesboro, Tennessee building in fiscal 1999 which had
   been previously leased to third parties. Other expense of $2.1 million was
   recorded in fiscal 1998 resulting from the favorable settlement of an
   adjustment to an accrual for a contingent liability with respect to certain
   old notes. (See Note 15 to the consolidated financial statements included
   elsewhere herein.)





Income
   Taxes.Income tax expense increased from $23.1
   million in fiscal 1998 to $26.8 million in fiscal 1999. The increase in tax
   expense is due primarily to the net effect of deferred tax assets which were
   fully reserved through valuation allowances during 1999 and the reduction in
   income tax expense for previously accrued taxes which were reversed in 1999,
   tax expense related to the tax effect in the U.S. of $45 million of deemed
   dividends received from Samsonite Europe in connection with the sale and
   transfer of certain Asian
 subsidiaries to Samsonite Europe, and taxes on foreign income; offset by a
   reduction in income tax expense due to the consolidated pretax loss in 1999.
   Valuation allowances were provided for deferred tax assets based on an
   assessment of the likelihood of their realization in view of (i) the current
   year net operating loss for book and tax purposes, (ii) expiration dates for
   tax net operating losses incurred in prior years, and (iii) the
   Companys forecasts of future taxable income taking into account the
   increased level of ongoing interest expense as a result of the 1998
   recapitalization. The difference between expected income tax expense,
   computed by applying the U.S. statutory rate to income from continuing
   operations, and income tax expense recognized, results primarily because of
   (i) foreign income tax expense provided on foreign earnings, (ii) valuation
   allowances provided on deferred tax assets, (iii) certain nontaxable
   liability adjustments, and (iv) state and local income taxes. See Note 12 to
   the consolidated financial statements included elsewhere herein for further
   analysis of income tax expense.





Extraordinary
   Loss.During fiscal 1999 the Company completed a
   tender offer for the Companys Series B Notes. The Company retired
   $52.3 million principal amount of the Series B Notes and paid redemption
   premiums and other related expenses totaling approximately $8.5 million.
   These costs along with $1.5 million of deferred financing costs were charged
   to expense and classified as an extraordinary item, net of tax effects,
   during fiscal 1999. On June 24, 1998, the Company completed a
   recapitalization. In connection with the 1998 recapitalization, deferred
   financing costs related to the refinanced senior credit facility of $0.4
   million were charged to expense and classified as an extraordinary item, net
   of tax effects. The extraordinary loss of $16.2 million for fiscal 1998
   resulted from (i) the payment of $17.3 million of redemption and market
   premiums and the write-off of deferred financing costs of $4.6 million
   related to the early retirement of $137.2 million principal amount of the
   Series B Notes, (ii) the payment of $0.3 million of early retirement fees
   and the write-off of $3.9 million of deferred financing costs related to
   refinancing of the previous senior credit facility, and (iii) the tax
   benefit from the aforementioned transactions of $9.9 million. See Note 9 to
   the consolidated financial statements included elsewhere herein.





Net Income
   (Loss).The Company had net income in fiscal 1998
   of $40.7 million and a net loss in fiscal 1999 of $88.8 million. The
   decrease in the net income from the prior year of $129.5 million is caused
   by the effect of the decreases in operating income and other income
   (expense)net and the increase in interest expense and income tax
   expense, offset by the decrease in extraordinary loss.





Senior Redeemable
   Preferred Stock Dividends and Accretion of Senior Redeemable Preferred Stock
   Discount.In fiscal 1999, this item represents
   the accrual of cumulative dividends on Senior Redeemable Senior Preferred
   Stock issued in connection with the June 24, 1998 recapitalization and
   accretion of the discount over the twelve-year term of the Senior Redeemable
   Preferred Stock.





Net Income (Loss)
   to Common Stockholders.This amount represents
   Net Income (Loss) reduced for dividends payable and the accretion of
   discount on the Senior Redeemable Preferred Stock and is the amount used to
   calculate Income (Loss) per Common Share.





Liquidity and
   Capital Resources





As reflected in the
   consolidated statements of cash flows included elsewhere herein, cash flows
   provided by operating activities increased by $21.0 million in fiscal 2000
   from fiscal 1999. Cash flows from net income, adjusted for nonoperating and
   noncash charges, increased by $38.5 million, primarily as a result of the
   decreases in operating loss described above, while cash flow used for
   changes in operating assets and liabilities increased by $17.5 million. At
   January 31, 2000, the Company had current assets in excess of current
   liabilities of $159.1 million compared to $174.2 million at January 31,
   1999, a decrease of $15.1 million. Current assets declined by $43.7 million
   primarily due to decreases in cash of $25.2 million, inventories of $15.8
   million, and receivables of $4.2 million, offset by increases in prepaid
   expenses and other current assets of $0.7 million and deferred income taxes
   of $0.8 million. The decrease in inventories is due primarily to the
   successful implementation of strategies in the U.S. Wholesale division to
   reduce inventory levels in the U.S. by improving the forecasting function,
   adjusting purchasing and production to accommodate changes in customer
   demand, and by increasing discontinued products sales through Company owned
   retail stores and to its wholesale customers.
 Despite higher consolidated sales volumes, receivables decreased as a result
   of efforts in the U.S. wholesale division to shorten payment terms and
   resolve delinquent customer payment issues.





Cash flows used in
   investing activities increased from $15.6 million in fiscal 1999 to $26.3
   million in fiscal 2000, an increase of $10.7 million. The increase was
   primarily caused by a decrease in proceeds from the sale of long-term assets
   and the decrease in capital expenditures. Capital expenditures were $23.6
   million in fiscal 2000 compared to $26.7 million in fiscal 1999. Capital
   expenditures in fiscal 2000 consist primarily of upgrades and replacements
   of machinery and equipment at the Companys manufacturing facilities in
   Belgium, Italy, and Denver, Colorado, expenditures in Europe and the U.S.
   related to new products, and the purchase of an office building in Warren,
   Rhode Island. Capital expenditures of $0.9 million in fiscal 2000 were
   incurred in less than 100% owned subsidiaries, and were therefore financed
   in part by the other shareholders in the ventures.





Cash flows used in
   financing activities declined from cash provided by financing activities in
   fiscal 1999 of $51.6 million to cash used of $8.3 million in fiscal 2000, a
   decline in cash flow of $59.9 million. In November 1999, the Company
   completed a rights offering described under Item 6, Selected Financial Data.
   Total gross proceeds from the rights offering were $55.1 million. Issuance
   expenses associated with the rights offering were $2.4 million. In addition
   to the payment of shareholder litigation costs, approximately $21.0 million
   of the proceeds were used to repay indebtedness under the senior credit
   facility and to repurchase approximately $12.0 million of the 10 3 / 4 % senior subordinated
   notes.





At January 31, 2000,
   long-term debt obligations (including current installments) were $432.5
   million compared to $503.1 million at January 31, 1999, a decrease of $70.6
   million. The decrease is primarily due to repayments of debt from proceeds
   of the rights offering and cash generated by operating activities. In
   addition, approximately $8.4 million relates to the impact of the
   fluctuation of foreign currency exchange rates.





The Companys
   senior credit facility requires the achievement and maintenance of certain
   financial ratios. At January 31, 2000, the Companys senior credit
   facility consists of a term loan arrangement with balances totaling $83.4
   million and undrawn availability of $100 million under the revolving credit
   portion of the facility. At January 31, 2000, the Company had approximately
   $6.3 million of outstanding letters of credit under the terms of the
   revolving credit portion of the facility. Additional borrowings under the
   senior credit facility are subject to the Companys continued ability
   to meet and maintain the financial ratios.





The Companys
   cash flow from operations together with amounts available under its credit
   facilities were sufficient to fund fiscal 2000 operations, scheduled
   payments of principal and interest on indebtedness, and capital
   expenditures. Management of the Company believes that cash flow from future
   operations and amounts available under its credit facilities and 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. The Company enters into
   foreign exchange contracts in order to reduce its exposure on certain
   foreign operations through the use of forward delivery commitments. During
   the past several years, the Companys most effective reduction to
   exposure against foreign currency changes has been the foreign currency
   denominated debt balances maintained in respect to its foreign operations.
   No assurance can be given that the Company will be able to offset losses in
   sales and operating income from negative exchange rate fluctuations through
   foreign currency forward exchange contracts, options, or other instruments
   which may be available to reduce economic exposure to currency fluctuations.
   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.





The Companys
   foreign operations in Asia consist primarily of distributorships organized
   as joint venture subsidiaries. Economies and local currencies throughout
   much of Asia entered a tumultuous period beginning in
 fiscal 1998 as a result of political turmoil and general economic problems
   with principal industries. The Asian economies continued to struggle
   throughout fiscal 1999, but have improved somewhat in fiscal 2000. The
   improvement in this region has resulted in improved operating results from
   the Companys Asian subsidiaries; however, the Company believes that
   Asian economies have not fully recovered and that there is still a
   significant risk associated with business operations in Asia.





The Company believes
   that disclosure of its Earnings Before Interest, Taxes, Depreciation, and
   Amortization (EBITDA) 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 calculate EBITDA in a different manner than the Company.
   EBITDA does not take into consideration substantial costs and cash flows of
   doing business, such as interest expense, income taxes, depreciation, and
   amortization, and should not be considered in isolation to or as a
   substitute for other measures of performance. EBITDA does not represent
   funds available for discretionary use by the Company because those funds are
   required for debt service, capital expenditures to replace fixed assets,
   working capital, and other commitments and contingencies. EBITDA is not an
   accounting term and is not used in generally accepted accounting principles.
   EBITDA, as calculated by the Company, also excludes extraordinary items,
   discontinued operations, and minority interest in earnings of subsidiaries.
   The Companys EBITDA for the years ended January 31, 2000, 1999, and
   1998 was $89.2 million, $9.9 million, and $126.2 million, respectively.
   However, these amounts include various items of income (expense) including
   (i) restructuring provisions in prior years; (ii) other income primarily
   related to various items from previous operations; and (iii) accrued costs
   related to the defense and resolution of shareholder litigation, expenses of
   the Recapitalization; gain (loss) on disposition of fixed assets, net; and
   other items, net; which items together aggregate $2.1 million, $40.4
   million, and $(17.9) million for the years ended January 31, 2000, 1999, and
   1998, respectively, which management believes should be added to (deducted
   from) the calculation of EBITDA to reflect recurring operating performance.
   As adjusted for the aggregate of these items of other income (expense),
   EBITDA for the years ended January 31, 2000, 1999 and 1998 was $91.3
   million, $50.3 million, and $108.3 million, respectively. EBITDA for fiscal
   1998 reflects a reduction of $4.1 million for negative production variances
   incurred during the last half of fiscal 1998.





Year 2000
   Compliance





The Year 2000 issue
   results from many computer programs being written using two digits rather
   than four to define a year. As a result, a computer program that has date
   sensitive software may recognize a date using 00 as the year
   1900 rather than the year 2000. The Company utilizes computer software,
   hardware, information and non-information systems throughout its worldwide
   operations in performing financial, manufacturing and distribution
   functions. Additionally, the Company interfaces with third party business
   partners using such systems. The Company did not experience a disruption to
   its business activities as the result of Year 2000 problems. While we
   continue to monitor electronic data received from third parties and
   generated internally as part of our routine business practices, as of March
   1, 2000, our efforts regarding Year 2000 were substantially complete. There
   can be no assurance that the Company or one of the entities it does business
   with will not experience a Year 2000 problem that could have an effect on
   the Company.





Conversion to the
   Euro





On January 1, 1999,
   eleven countries in Europe adopted a common currency, the euro
   and exchange rates between the currencies of the eleven countries were fixed
   against the new euro. The former currencies of those eleven countries will
   remain legal tender as denominations of the euro until January 1, 2002 and
   goods and services may be paid for using either the euro or the former
   currency until that time. Approximately 75% of Samsonite Europes sales
   are within these eleven countries. The euro conversion has a significant
   impact on the Companys operations in terms of pricing policies,
   currency risk and exchange, information systems, and financial reporting.
   Samsonite Europe has been addressing euro implementation issues since fiscal
   1998 and has
 formed two different project teams to address euro issues: one to address
   competitive and marketing issues and another to address administrative,
   financial and computer systems issues.





The Company believes
   the adoption of the euro will have a positive effect on Samsonite
   Europes operations. Having a common currency among many of the
   countries that Samsonite Europe sells into will reduce the administrative
   burden of multiple currencies as well as reduce the costs of hedging and
   exchanging currencies and resulting exchange gains and losses. As the euro
   becomes accepted in the international money markets, Samsonite Europe may
   also reduce its currency risk against the U.S. dollar for purchases of goods
   in the Far East by using the euro to pay for such purchases rather than the
   U.S. dollar, which is currently the primary currency used in international
   trade. Because of the weakness in the euro since its adoption, the Company
   has not begun to use the euro for such purchases and does not expect this to
   occur within fiscal year 2001.





Samsonite Europe has
   adjusted its wholesale pricing to reduce product pricing differences between
   countries which have existed historically; however, price variations between
   countries will continue to exist at the retail level due to differences in
   transportation costs, value added tax rates, and dealer margins in the
   various European countries. Because of Samsonite Europes strong
   competitive position throughout the countries participating in the euro
   conversion and significant economic barriers to entry, the Company does not
   believe that potential increased competition and price transparency as a
   result of the euro will have an adverse effect on the Companys sales
   or results of operations.





Samsonite Europe
   currently intends to continue using the Belgian franc as its functional
   currency until its fiscal year beginning January 1, 2001. As of December 31,
   1998, Samsonite Europes information systems have been modified such
   that order entry, customer invoicing, and payment processing can be
   accomplished in the former currency or the euro, while converting financial
   reporting to the functional currency (the Belgian franc). Additional
   extensive system modifications are necessary to convert the functional
   currency to the euro. The target completion date for such modifications,
   which are being accomplished using existing internal staffing, is June 30,
   2000. Most system modifications to date have also been accomplished using
   internal staffing with minimal incremental costs incurred to date. The
   Company estimates that it has incurred incremental costs through January 31,
   2000 of approximately $50,000 to implement the euro conversion and estimates
   that it will spend a total of approximately $100,000 to fully implement its
   euro conversion. These cost estimates do not include costs of existing
   internal staff who have devoted time to the euro conversion. All costs
   related to the Euro conversion have been charged to expense.





Effect of Recently
   Issued Accounting Standards





In June 1998, the
   Financial Accounting Standards Board issued Statement No. 133,Accounting
   for Derivative Instruments and Hedging Activities (SFAS
   133), which is effective for fiscal years beginning after June 15,
   2000. SFAS No. 133 requires companies to record derivatives on the balance
   sheet as assets or liabilities, measured at fair value. Gains or losses
   resulting from changes in the values of those derivatives would be accounted
   for depending on the use of the derivative and whether it qualifies under
   the standard for hedge accounting. The Company does not anticipate a
   material impact on its financial condition or results of operations as a
   result of implementing this standard.





ITEM
   7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
   MARKET RISK





Market
   Risk





The Companys
   primary market risks include changes in foreign currency exchange rates and
   interest rates. Market risk is the potential loss arising from adverse
   changes in market rates and prices, such as foreign currency exchange and
   interest rates. The Company enters into forward financial instruments to
   manage and reduce the impact of changes in foreign currency rates with major
   financial institutions. From time to time, the Company uses interest rate
   swaps to manage interest rate risk. The Company does not use financial
   instruments to manage changes in commodity prices. The Company does not hold
   or issue financial instruments for trading purposes.





Foreign Exchange
   Contracts





The Company enters
   into forward foreign exchange and option contracts to reduce its economic
   exposure to translated earnings of foreign subsidiaries (primarily the
   translated earnings of European operations which report earnings in Belgian
   francs), intercompany royalty payments from foreign subsidiaries, and
   certain third party royalty payments receivable in Japanese yen. The
   Companys European subsidiary enters into forward exchange contracts
   primarily to reduce its economic exposure to purchases of goods from the Far
   East payable in U.S. dollars and certain other contracts to reduce its
   economic exposure to receipts payable in various European
   currencies.





Contracts entered
   into to reduce the Companys exposure to translated earnings of foreign
   subsidiaries and intercompany royalties are marked to market at the end of
   each month and gains or losses are included in Other Income
   (Expense)Net. Gains or losses on foreign exchange contracts entered
   into to reduce the Companys exposure third party royalty payments,
   product purchases, and receipts are included in income or loss when the
   contracts are closed.





At January 31, 2000,
   the Company and its European subsidiary had forward foreign exchange
   contracts outstanding having a total contract amount of approximately $35.0
   million with a weighted average maturity of 174 days. If there were a ten
   percent adverse change in foreign currency exchange rates relative to the
   outstanding forward exchange contracts, the loss in earnings from the amount
   included in results of operations for the year ended January 31, 2000 would
   be approximately $3.4 million, before the effect of income taxes. Any
   hypothetical loss in earnings would be offset by changes in the underlying
   value of translated earnings or royalty income, to the extent such earnings
   or income is equal to the amount of currency exposed, or for product
   purchases by exchange gains.





Interest
   Rates





At January 31, 2000,
   the Company had approximately $344.2 million of fixed rate long-term debt
   (including current maturities.) The fair market value of long-term fixed
   interest rate debt is subject to interest rate risk. Generally, among other
   factors including credit ratings, the fair market value of fixed interest
   rate debt will increase as interest rates fall and decrease as interest
   rates rise. The estimated fair value of the Companys total long-term
   debt (including current portion) at January 31, 2000 was $293.5 million,
   which was less than the carrying value by $50.7 million. Fair values were
   determined primarily from quoted market rates since almost all the fixed
   rate long-term debt at January 31, 2000 consists of the Companys
   outstanding publicly traded subordinated notes. A 1% decrease from
   prevailing interest rates at January 31, 2000, would result in an estimated
   increase in fair value of total fixed rate long-term debt of approximately
   $15.5 million.





At January 31, 2000,
   the Company had an outstanding variable to fixed interest rate swap
   agreement with a notional amount of $25.0 million, a pay rate of 6.14%, and
   a receive rate of 6.13%. The swap agreement dated November 8, 1999 has a
   two-year term and can be canceled by either party to the swap after one
   year. The receive rate reprices every three months.





ITEM
   8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY
   DATA





The consolidated
   financial statements and supplementary financial information required by
   this Item and included in this Report are listed in the Index to
   Consolidated Financial Statements and Schedule appearing on page
   F-1.





ITEM
   9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
   ACCOUNTING AND FINANCIAL DISCLOSURE





None.





PART
   III





ITEM
   10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE
   REGISTRANT





The information
   required by Item 10 is incorporated by reference from the 2000 Proxy
   Statement to be filed with the Securities and Exchange Commission within 120
   days of the end of the fiscal year covered by this Report.





ITEM
   11.    EXECUTIVE COMPENSATION





The information
   required by Item 11 is incorporated by reference from the 2000 Proxy
   Statement to be filed with the Securities and Exchange Commission within 120
   days of the end of the fiscal year covered by this Report.





ITEM
   12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
   AND MANAGEMENT





The information
   required by Item 12 is incorporated by reference from the 2000 Proxy
   Statement to be filed with the Securities and Exchange Commission within 120
   days of the end of the fiscal year covered by this Report.





ITEM
   13.    CERTAIN RELATIONSHIPS AND RELATED
   TRANSACTIONS





The information
   required by Item 13 is incorporated by reference from the 2000 Proxy
   Statement to be filed with the Securities and Exchange Commission within 120
   days of the end of the fiscal year covered by this Report.





PART
   IV





ITEM
   14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND
   REPORTS ON FORM 8-K





(a)  1.
   Financial Statements:





| | See Index to
     Consolidated Financial Statements and Schedule on page F-1
     hereof.
| | -----------------------------------------------------------------------------------------




2. Financial Statement
   Schedule:





| | See Index to
     Consolidated Financial Statements and Schedule on page F-1
     hereof.
| | -----------------------------------------------------------------------------------------




|3. | Exhibits:
|-- | ---------




| | See Index to
     Exhibits on pages E-1 through E-5 hereof.
| | -----------------------------------------------------------




(b) Reports on Form
   8-K.





| | None.
| | -----




SIGNATURES





Pursuant to the
   requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
   the Registrant has duly caused this Report to be signed on its behalf by the
   undersigned, thereunto duly authorized.





| | SAMSONITE
   CORPORATION
| | ------------------------




| | /s/    LUC
   VAN
   NEVEL
| | --------------------------

| | By:
| | ---

| | Chief Executive
     Officer, President and Director
| | ----------------------------------------------------




| | Date: April 17,
     2000
| | -------------------------




Each person whose
   signature appears below constitutes and appoints Luc Van Nevel and Richard
   H. Wiley, or either of them, his attorneys-in-fact, with the power of
   substitution, for him in any and all capacities, to sign any amendments to
   this report on Form 10-K for the year ended January 31, 2000, and to file
   the same, with exhibits thereto and other documents in connection therewith,
   with the Securities and Exchange Commission, hereby ratifying and confirming
   all that said attorneys-in-fact, or their substitute or substitutes, may do
   or cause to be done by virtue hereof.





Pursuant to the
   requirements of the Securities Exchange Act of 1934, this Report has been
   signed below by the following persons on behalf of the registrant and in the
   capacities and on the dates indicated.





|Signature                                                         |  | Title                                                           |  | Date                         
|----------------------------------------------------------------- |  | --------------------------------------------------------------- |  | -----------------------------
|                                                                  | 
|/s/    RICHARD
    H. WILEYRichard H.
      Wiley                 |  | Chief Financial
      Officer,
    
    Treasurer and Secretary |  | April 17,
      2000         
|                                                                  | 
|/s/    BERNARD
     ATTALBernard
       Attal                     |  | Director                                                        |  | April 17,
       2000        
|                                                                  | 
|/s/    LEON
      D. BLACKLeon D.
        Black                   |  | Director                                                        |  | April 17,
        2000       
|                                                                  | 
|/s/    EMMANUEL
       CUEFFEmmanuel
         Cueff               |  | Director                                                        |  | April 17,
         2000      
|                                                                  | 
|/s/    ROBERT
        H. FALKRobert H.
          Falk             |  | Director                                                        |  | April 17,
          2000     
|                                                                  | 
|/s/    RICHARD
         R. NICOLOSIRichard R.
           Nicolosi |  | Director                                                        |  | April 17,
           2000    
|                                                                  | 
|/s/    MARK
          H. RACHESKYMark H.
            Rachesky     |  | Director                                                        |  | April 17,
            2000   
|                                                                  | 
|/s/    ROBERT
           L. ROSENRobert
             L. Rosen     |  | Director                                                        |  | April 17,
             2000  
|                                                                  | 
|/s/    MARC
            J. ROWANMarc J.
              Rowan       |  | Director                                                        |  | April 17,
              2000 
|                                                                  | 
|/s/    STEPHEN
             J. SOLARZStephen J. Solarz            |  | Director                                                        |  | April 17,
               2000




INDEX
             TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE





|                                                                                                                                                                               |  | Page
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ----
|Consolidated Financial Statements:                                                                                                                                            
|
|Independent Auditors Report                                                                                                                                                   |  | F-2 
|Consolidated Balance Sheets as of January 31, 2000 and
               1999                                                                                                     |  | F-3 
|
|Consolidated Statements of Operations for each of the
               years in the three-year period ended
             
                  January 31, 2000                     |  | F-4 
|Consolidated Statements of Stockholders Equity
               (Deficit) for each of the years in the three-year period
             
                  ended January 31, 2000 |  | F-5 
|Consolidated Statements of Cash Flows for each of the
               years in the three-year period ended
             
                  January 31, 2000                     |  | F-7 
|Notes to
               Consolidated Financial Statements                                                                                                                      |  | F-9 
|                                                                                                                                                                              
|Schedule:                                                                                                                                                                     
|Schedule
               IIValuation and Qualifying Accounts                                                                                                                   |  | F-34




INDEPENDENT AUDITORS REPORT





The Board
             of Directors


Samsonite
             Corporation:





We have
             audited the accompanying consolidated financial statements of
             Samsonite Corporation and subsidiaries as listed in the
             accompanying index. In connection with our audits of the
             consolidated financial statements, we also have audited the
             financial statement schedule as listed in the accompanying index.
             These consolidated financial statements and financial statement
             schedule are the responsibility of the Companys management.
             Our responsibility is to express an opinion on these consolidated
             financial statements and financial statement schedule 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, 2000
             and 1999, and the results of their operations and their cash flows
             for each of the years in the three-year period ended January 31,
             2000, in conformity with generally accepted accounting principles.
             Also in our opinion, the related financial statement schedule,
             when considered in relation to the basic consolidated financial
             statements taken as a whole, presents fairly, in all material
             respects, the information set forth therein.





| | KPMG
               LLP
| | -----------------------




Denver,
             Colorado


March 17,
             2000





SAMSONITE CORPORATION AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS


January
             31, 2000 and 1999


(In
             thousands)


|                                                                                                                                                                                                                                                |  | January 31,
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------
|
|ASSETS                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                |  |            
|Current
               assets:                                                                                                                                                                                                                 
|Cash and cash equivalents                                                                                                                                                                                                                       |  | $  16,705  
|Trade receivables, net of allowances for doubtful
               accounts of $5,489 and $7,065
             

                        
                     (Note 9)                                                                            |  | 75,261     
|Notes and other receivables                                                                                                                                                                                                                     |  | 10,438     
|Inventories (Notes 5 and 9)                                                                                                                                                                                                                     |  | 171,769    
|Deferred income tax assets (Note 12)                                                                                                                                                                                                            |  | 3,320      
|Prepaid expenses and other current assets                                                                                                                                                                                                       |  | 15,273     
|                                                                                                                                                                                                                                                |  |            
|Total current assets                                                                                                                                                                                                                            |  | 292,766    
|                                                                                                                                                                                                                                               
|Property,
               plant and equipment, net (Notes 5, 6 and 9)                                                                                                                                                                            |  | 141,254    
|Intangible assets, less accumulated amortization of
               $52,178 and $46,786 (Notes 3, 7
             
                  and 9)                                                                                                       |  | 109,007    
|Other
               assets and long-term receivables, net of allowance for doubtful
               accounts
             
                  of $521                                                                                            |  | 17,553     
|                                                                                                                                                                                                                                                |  |            
|                                                                                                                                                                                                                                                |  | $560,580   
|                                                                                                                                                                                                                                                |  |            
|LIABILITIES AND STOCKHOLDERS EQUITY
               (DEFICIT)                                                                                                                                                                                  
|                                                                                                                                                                                                                                                |  |            
|                                                                                                                                                                                                                                               
|Current
               liabilities:                                                                                                                                                                                                            
|Short-term debt (Note 8)                                                                                                                                                                                                                        |  | $    7,108 
|Current installments of long-term obligations (Note
               9)                                                                                                                                                                           |  | 5,379      
|Accounts payable                                                                                                                                                                                                                                |  | 46,950     
|Accrued interest expense                                                                                                                                                                                                                        |  | 6,295      
|Accrued compensation and employee
               benefits                                                                                                                                                                                       |  | 21,566     
|Other accrued expenses (Note 15)                                                                                                                                                                                                                |  | 46,417     
|                                                                                                                                                                                                                                                |  |            
|Total current liabilities                                                                                                                                                                                                                       |  | 133,715    
|                                                                                                                                                                                                                                               
|Long-term
               obligations, less current installments (Notes 2, 9 and
               14)                                                                                                                                              |  | 427,094    
|Deferred
               income tax liabilities (Note 12)                                                                                                                                                                                        |  | 15,695     
|Other
               non-current liabilities (Note 13)                                                                                                                                                                                          |  | 48,425     
|                                                                                                                                                                                                                                                |  |            
|Total liabilities                                                                                                                                                                                                                               |  | 624,929    
|                                                                                                                                                                                                                                                |  |            
|                                                                                                                                                                                                                                               
|Minority
               interests in consolidated subsidiaries                                                                                                                                                                                  |  | 10,009     
|Senior
               redeemable preferred stock (aggregate liquidation preference of
               $217,805 and
             
                  $190,034, net of discount and
               issuance costs of $10,680 and $11,705) (Note 10) |  | 207,125    
|                                                                                                                                                                                                                                               
|Stockholders equity (deficit) (Notes 2, 9, 10, 11
               and 19):                                                                                                                                                                     
|Preferred stock                                                                                                                                                                                                                                 |  |           
|Common stock                                                                                                                                                                                                                                    |  | 302        
|Additional paid-in capital                                                                                                                                                                                                                      |  | 489,963    
|Accumulated deficit                                                                                                                                                                                                                             |  | (330,219   
|Accumulated other comprehensive income
               (loss)                                                                                                                                                                                    |  | (21,529    
|                                                                                                                                                                                                                                                |  |            
|                                                                                                                                                                                                                                                |  | 138,517    
|Treasury stock, at cost (10,500,000
               shares)                                                                                                                                                                                      |  | (420,000   
|                                                                                                                                                                                                                                                |  |            
|Total stockholders equity
               (deficit)                                                                                                                                                                                             |  | (281,483   
|                                                                                                                                                                                                                                                |  |            
|Commitments and contingencies (Notes 9, 10, 11, 13
               and 15)                                                                                                                                                                      
|                                                                                                                                                                                                                                                |  | $560,580   
|                                                                                                                                                                                                                                                |  |            




See
             accompanying notes to consolidated financial
             statements.





SAMSONITE CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS


(In
             thousands, except per share amounts)





|                                                                                                                                                                                                  |  | Year
               ended January 31,
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------
|
|Net
               sales                                                                                                                                                                          |  | $767,685                             
|Cost of
               goods sold                                                                                                                                                                 |  | 442,325                              
|                                                                                                                                                                                                  |  |                                      
|Gross profit                                                                                                                                                                                      |  | 325,360                              
|                                                                                                                                                                                                 
|Selling,
               general and administrative expenses                                                                                                                                       |  | 261,792                              
|Amortization of intangible assets                                                                                                                                                                 |  | 5,712                                
|Provision
               for restructuring operations (Note 4)                                                                                                                                    |  |                                     
|                                                                                                                                                                                                  |  |                                      
|Operating income                                                                                                                                                                                  |  | 57,856                               
|                                                                                                                                                                                                 
|Other
               income (expense):                                                                                                                                                           
|Interest income                                                                                                                                                                                   |  | 2,022                                
|Interest expense and amortization of debt issue
               costs and
             

                        
                     premium                                                     |  | (52,293                              
|Other income (expense)net (Notes 15 and
               16)                                                                                                                                       |  | 3,671                                
|                                                                                                                                                                                                  |  |                                      
|Income (loss) before income taxes, minority
               interest, and
             

                        
                        
                      extraordinary
               item |  | 11,256                               
|                                                                                                                                                                                                 
|Income
               tax expense (Note 12)                                                                                                                                                       |  | (12,576                              
|Minority
               interest in earnings of subsidiaries                                                                                                                                      |  | (1,747                               
|                                                                                                                                                                                                  |  |                                      
|Income (loss) before extraordinary
               item                                                                                                                                            |  | (3,067                               
|                                                                                                                                                                                                 
|Extraordinary itemgain (loss) on extinguishment of
               debt, net of
             
                  income tax benefit of $0, $3,959 and
               $9,930 (Notes 2 and 9)        |  | 1,225                                
|                                                                                                                                                                                                  |  |                                      
|Net income (loss)                                                                                                                                                                                 |  | (1,842                               
|                                                                                                                                                                                                 
|Senior
               redeemable preferred stock dividends and accretion of senior
             
                  redeemable preferred stock discount
               (Note 10)                   |  | (28,796                              
|                                                                                                                                                                                                  |  |                                      
|Net income (loss) to common
               stockholders                                                                                                                                           |  | $(30,638                             
|                                                                                                                                                                                                  |  |                                      
|                                                                                                                                                                                                 
|Income
               (loss) per common sharebasic:                                                                                                                                             
|Income (loss) before extraordinary
               item                                                                                                                                            |  | $    (2.63                           
|Extraordinary item                                                                                                                                                                                |  | 0.10                                 
|                                                                                                                                                                                                  |  |                                      
|Net income (loss) per share                                                                                                                                                                       |  | $    (2.53                           
|                                                                                                                                                                                                  |  |                                      
|                                                                                                                                                                                                 
|Income
               (loss) per common shareassuming dilution:                                                                                                                                 
|Income (loss) before extraordinary
               item                                                                                                                                            |  | $    (2.63                           
|Extraordinary item                                                                                                                                                                                |  | 0.10                                 
|                                                                                                                                                                                                  |  |                                      
|Net income (loss) per share                                                                                                                                                                       |  | $    (2.53                           
|                                                                                                                                                                                                  |  |                                      




See
             accompanying notes to consolidated financial
             statements.





SAMSONITE CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
             (DEFICIT)


(In
             thousands, except share amounts)





|                                                                                                                                                                                                                                                                                                                                                                                                              |  | Preferred
             
             stock(1) |  | Common
             
             stock(2) |  | Additional
             
             paid-in
             
             capital |  | Accumu-
             
             lated
             
             other
             
             compre-
             
             hensive
             
             income |   | Accumu-
             
             lated
             
             deficit |          | Compre-
             
             hensive
             
             income
             
             (loss) |  | Unearned
             
             compen-
             
             sation
             
             restricted
             
             shares |   | Treasury
             
             stock
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------- |  | ------------------------------------------ |  | -------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------------------------------------------------------------------------- | -------- | -------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------- | - | -----------------------------------------
|Balance,
               January 31, 1997                                                                                                                                                                                                                                                                                                                                                                      |  | $                                            |  | 160                                        |  | 266,752                                                                          |  | (5,337                                                                                                                                                                            | ) |                                                                             | (235,870 | )                                                                                                              |  |                                                                                                                                                       |   |                                          
|Net
               income                                                                                                                                                                                                                                                                                                                                                                                     |  |                                              |  |                                           |  |                                                                                 |  |                                                                                                                                                                                  |   |                                                                             | 40,699   |                                                                                                                |  | 40,699                                                                                                                                                |   |                                          
|Foreign
               currency translation
             

                        
                  adjustment                                                                                                                                                                                                                                                                                              |  |                                              |  |                                           |  |                                                                                 |  | (9,112                                                                                                                                                                            | ) |                                                                             |         |                                                                                                                |  | (9,112                                                                                                                                                | ) |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                               |  |                                            |  |                                                                                  |  |                                                                                                                                                                                   |   |                                                                             |          |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Comprehensive
               income (loss)                                                                                                                                                                                                                                                                                                                                                                    |  |                                              |  |                                           |  |                                                                                 |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  | $  31,587                                                                                                                                             |   |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                               |  |                                            |  |                                                                                  |  |                                                                                                                                                                                   |   |                                                                             |          |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Issuance
               of 3,300,000 shares of
             

                        
                  common stock in public offering, net
             

                        
                  of offering costs and underwriting
             

                        
                  discount of $8,303 (Note 19)                                                                             |  |                                              |  | 33                                         |  | 130,209                                                                          |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Issuance
               of 4,032 shares to directors for
             

                        
                  services (Note 11)                                                                                                                                                                                                                                                                         |  |                                              |  |                                           |  | 174                                                                              |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Issuance
               of 1,033,203 shares for
             

                        
                  exercise of employee stock options
             

                        
                  and related income tax benefits, net of
             

                        
                  889,450 shares exchanged (Notes 11
             

                        
                  and 19) |  |                                              |  | 11                                         |  | 20,617                                                                           |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Amortization of restricted stock award
             

                        
                  to compensation expense (Note 11)                                                                                                                                                                                                                                                                            |  |                                              |  |                                           |  |                                                                                 |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Compensation expense accrued for
             

                        
                  stock bonus awards (Note 11)                                                                                                                                                                                                                                                                                       |  |                                              |  |                                           |  | 710                                                                              |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                               |  |                                            |  |                                                                                  |  |                                                                                                                                                                                   |   |                                                                             |          |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Balance,
               January 31, 1998                                                                                                                                                                                                                                                                                                                                                                      |  | $                                            |  | 204                                        |  | 418,462                                                                          |  | (14,449                                                                                                                                                                           | ) |                                                                             | (195,171 | )                                                                                                              |  |                                                                                                                                                       |   |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                             
|Net
               loss                                                                                                                                                                                                                                                                                                                                                                                       |  | $                                            |  |                                           |  |                                                                                 |  |                                                                                                                                                                                  |   |                                                                             | (88,778  | )                                                                                                              |  | (88,778                                                                                                                                               | ) |                                          
|Foreign
               currency translation
             

                        
                  adjustment                                                                                                                                                                                                                                                                                              |  |                                              |  |                                           |  |                                                                                 |  | 2,023                                                                                                                                                                             |   |                                                                             |         |                                                                                                                |  | 2,023                                                                                                                                                 |   |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                               |  |                                            |  |                                                                                  |  |                                                                                                                                                                                   |   |                                                                             |          |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Comprehensive
               income (loss)                                                                                                                                                                                                                                                                                                                                                                    |  |                                              |  |                                           |  |                                                                                 |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  | $(86,755                                                                                                                                              | ) |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                               |  |                                            |  |                                                                                  |  |                                                                                                                                                                                   |   |                                                                             |          |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Issuance
               of 17,655 shares to directors
             

                        
                  for services (Note 11)                                                                                                                                                                                                                                                                        |  |                                              |  | 1                                          |  | 169                                                                              |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Issuance
               of 494,649 shares for exercise
             

                        
                  of employee stock options and
             

                        
                  116,667 shares for stock bonus
             

                        
                  awards (Note 11)                                                                                            |  |                                              |  | 5                                          |  | 7,705                                                                            |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Amortization of restricted stock award
             

                        
                  to compensation expense (Note 11)                                                                                                                                                                                                                                                                            |  |                                              |  |                                           |  |                                                                                 |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Compensation expense accrued for
             

                        
                  stock bonus awards (Note 11)                                                                                                                                                                                                                                                                                       |  |                                              |  |                                           |  | 473                                                                              |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Compensation expense for stock options
             

                        
                  (Note 11)                                                                                                                                                                                                                                                                                                    |  |                                              |  |                                           |  | 3,722                                                                            |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Common
               stock warrants issued with
             

                        
                  redeemable preferred stock (Note
             

                        
                  10)                                                                                                                                                                                                     |  |                                              |  |                                           |  | 5,820                                                                            |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Preferred
               stock dividends and accretion
             

                        
                  of discount (Note 10)                                                                                                                                                                                                                                                                        |  |                                              |  |                                           |  |                                                                                 |  |                                                                                                                                                                                  |   |                                                                             | (15,632  | )                                                                                                              |  |                                                                                                                                                       |   |                                          
|Purchase
               of 10,500,000 shares for
             

                        
                  treasury (Note 2)                                                                                                                                                                                                                                                                                  |  |                                              |  |                                           |  |                                                                                 |  |                                                                                                                                                                                  |   |                                                                             |         |                                                                                                                |  |                                                                                                                                                       |   |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                              |  |                                               |  |                                            |  |                                                                                  |  |                                                                                                                                                                                   |   |                                                                             |          |                                                                                                                |  |                                                                                                                                                       |   |                                          
|Balance,
               January 31, 1999                                                                                                                                                                                                                                                                                                                                                                      |  | $                                            |  | 210                                        |  | 436,351                                                                          |  | (12,426                                                                                                                                                                           | ) |                                                                             | (299,581 | )                                                                                                              |  |                                                                                                                                                       |   |                                          




(Continued)





SAMSONITE CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
             (DEFICIT)(Continued)


(In
             thousands, except share amounts)





|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | Preferred
             
             stock(1) |   | Common
             
             stock(2) |     | Additional
             
             paid-in
             
             capital |         | Accumu-
             
             lated
             
             other
             
             compre-
             
             hensive
             
             income |         | Accumu-
             
             lated
             
             deficit |  | Compre-
             
             hensive
             
             income
             
             (loss) |   | Unearned
             
             compen-
             
             sation
             
             restricted
             
             shares |          | Treasury
             
             stock
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------- | - | ------------------------------------------ | --- | -------------------------------------------------------------------------------- | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | --------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------- | -------- | -----------------------------------------
|Net
               loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | $                                            |   |                                            |    |                                                                                  |        |                                                                                                                                                                                   |        |                                                                             |  | (1,842                                                                                                         | ) |                                                                                                                                                       | (1,842   | )                                        
|Foreign
               currency translation
             

                        
                  adjustment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                              |   |                                            |    |                                                                                  |        |                                                                                                                                                                                   | (9,103  | )                                                                           |  |                                                                                                               |   |                                                                                                                                                       | (9,103   | )                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                               |   |                                            |     |                                                                                  |         |                                                                                                                                                                                   |         |                                                                             |  |                                                                                                                |   |                                                                                                                                                       |          |                                          
|Comprehensive income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  |                                              |   |                                            |    |                                                                                  |        |                                                                                                                                                                                   |        |                                                                             |  |                                                                                                               |   |                                                                                                                                                       | $(10,945 | )                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                               |   |                                            |     |                                                                                  |         |                                                                                                                                                                                   |         |                                                                             |  |                                                                                                                |   |                                                                                                                                                       |          |                                          
|Issuance
               of 23,222 shares to directors
             

                        
                  for services (Note 11)                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  |                                              |   |                                            |     |                                                                                  | 139     |                                                                                                                                                                                   |        |                                                                             |  |                                                                                                               |   |                                                                                                                                                       |          |                                          
|Issuance
               of 15,220 shares for exercise
             

                        
                  of employee stock options (Note
             

                        
                  11)                                                                                                                                                                                                                                                                                                                                                                                      |  |                                              |   |                                            |    |                                                                                  | 38      |                                                                                                                                                                                   |        |                                                                             |  |                                                                                                               |   |                                                                                                                                                       |          |                                          
|Compensation expense accrued for
             

                        
                  stock bonus awards (Note 11)                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  |                                              |   |                                            |    |                                                                                  | 138     |                                                                                                                                                                                   |        |                                                                             |  |                                                                                                               |   |                                                                                                                                                       |          |                                          
|Compensation expense for stock
             

                        
                  options (Note 11)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |                                              |   |                                            |    |                                                                                  | 662     |                                                                                                                                                                                   |        |                                                                             |  |                                                                                                               |   |                                                                                                                                                       |          |                                          
|Issuance
               of 1,968 shares of Series Z
             

                        
                  Preferred Stock, net of offering
             

                        
                  costs of $1,000 (Note 19)                                                                                                                                                                                                                                                                                                                                                                 |  | 49,000                                        |   |                                            |    |                                                                                  |        |                                                                                                                                                                                   |        |                                                                             |  |                                                                                                               |   |                                                                                                                                                       |          |                                          
|Issuance
               of 846,858 shares of common
             

                        
                  stock and conversion of 1,968
             

                        
                  shares of Series Z Preferred Stock to
             

                        
                  8,333,333 shares of common stock
             

                        
                  in connection with rights offering,
             

                        
                  net of offering costs of $1,355
             

                        
                  (Note 19) |  | (49,000                                       | ) |                                            | 92  |                                                                                  | 52,635  |                                                                                                                                                                                   |        |                                                                             |  |                                                                                                               |   |                                                                                                                                                       |          |                                          
|Senior
               Redeemable Preferred Stock
             

                        
                  dividends and accretion of Senior
             

                        
                  Redeemable Preferred Stock
             

                        
                  discount (Note 10)                                                                                                                                                                                                                                                                                     |  |                                              |   |                                            |    |                                                                                  |        |                                                                                                                                                                                   |        |                                                                             |  | (28,796                                                                                                        | ) |                                                                                                                                                       |          |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                               |   |                                            |     |                                                                                  |         |                                                                                                                                                                                   |         |                                                                             |  |                                                                                                                |   |                                                                                                                                                       |          |                                          
|Balance,
               January 31, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | $                                            |   |                                            | 302 |                                                                                  | 489,963 |                                                                                                                                                                                   | (21,529 | )                                                                           |  | (330,219                                                                                                       | ) |                                                                                                                                                       |          |                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  |                                               |   |                                            |     |                                                                                  |         |                                                                                                                                                                                   |         |                                                                             |  |                                                                                                                |   |                                                                                                                                                       |          |                                          




|(1) | $.01 par
               value; 2,000,000 shares authorized; 214,000 and 186,723 Senior
               Redeemable Preferred shares issued and outstanding at January
               31, 2000 and 1999, respectively; no Series Z Preferred shares
               issued or outstanding at January 31, 2000.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | $.01 par
               value; 60,000,000 shares authorized; 30,218,672, 21,000,039 and
               20,371,068 shares issued at January 31, 2000, 1999 and 1998,
               respectively and 19,718,672, 10,500,039 and 20,371,068
               outstanding at January 31, 2000, 1999 and 1998,
               respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




See
             accompanying notes to consolidated financial
             statements.





SAMSONITE CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS


(In
             thousands)





|                                                                                                                                                                                                                        |  | Year
               ended January 31,
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------
|
|Cash
               flows from operating activities:                                                                                                                                                                   
|Net income (loss)                                                                                                                                                                                                       |  | $  (1,842                            
|Adjustments to reconcile net income (loss) to net
               cash provided by
             

                        
                     (used in) operating
               activities:                          
|Nonoperating loss (gain) items:                                                                                                                                                                                        
|Loss (gain) on extinguishment of
               debt                                                                                                                                                                    |  | (1,225                               
|Loss (gain) on disposition of assets
               held for sale and fixed
             

                        
                        
                        
                       assets,
               net |  | 432                                  
|Depreciation and amortization of property,
               plant and equipment                                                                                                                                           |  | 21,912                               
|Amortization of debt issue costs and
               premium                                                                                                                                                             |  | 2,111                                
|Amortization of intangible assets                                                                                                                                                                                       |  | 5,712                                
|Amortization of stock awards and stock issued
               for services                                                                                                                                               |  | 277                                  
|Deferred income tax expense                                                                                                                                                                                             |  | (27                                  
|Adjustment of allowances for contingencies
               from previous
             

                        
                        
                      operations                                               |  |                                     
|Adjustment to accrual for resolution of claims
               with respect to old
             

                        
                        
                      notes                                          |  | (3,500                               
|Adjustment of reserves related to prior
               years tax provisions                                                                                                                                            |  |                                     
|Compensation expense for adjustment of stock
               options                                                                                                                                                     |  | 662                                  
|Net provision for doubtful accounts                                                                                                                                                                                     |  | 2,031                                
|Net provision for restructuring
               operations                                                                                                                                                               |  |                                     
|Changes in operating assets and
               liabilities:                                                                                                                                                            
|Trade and other receivables                                                                                                                                                                                             |  | 586                                  
|Inventories                                                                                                                                                                                                             |  | 15,798                               
|Other current assets                                                                                                                                                                                                    |  | (795                                 
|Accounts payable and accrued
               liabilities                                                                                                                                                                 |  | (20,812                              
|Other adjustmentsnet                                                                                                                                                                                                   |  | (1,415                               
|                                                                                                                                                                                                                        |  |                                      
|Net cash provided by (used in) operating
               activities                                                                                                                                                      |  | 19,905                               
|                                                                                                                                                                                                                        |  |                                      
|Cash
               flows provided by (used in) investing activities:                                                                                                                                                  
|Proceeds from sale of assets held for sale, property
               and equipment and
             

                        
                     other asset                                                          |  | 678                                  
|Purchases of property, plant and
               equipment:                                                                                                                                                             
|By Company and wholly-owned
               subsidiaries                                                                                                                                                                 |  | (22,749                              
|By less than 100% owned
               subsidiaries                                                                                                                                                                     |  | (862                                 
|Acquisition of foreign distributorships                                                                                                                                                                                 |  | (545                                 
|Other                                                                                                                                                                                                                   |  | (2,818                               
|                                                                                                                                                                                                                        |  |                                      
|Net cash used in investing
               activities                                                                                                                                                                    |  | $(26,296                             
|                                                                                                                                                                                                                        |  |                                      




(continued)





SAMSONITE CORPORATION AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH
             FLOWS(Continued)


(In
             thousands)





|                                                                                                                                                                                                      |  | Year
               ended January 31,
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------
|
|Cash
               flows provided by (used in) financing activities:                                                                                                                                
|Net borrowings (payments) of senior credit
               facility                                                                                                                                    |  | $(45,994                             
|Proceeds from issuance of senior subordinated
               notes                                                                                                                                    |  |                                     
|Proceeds from issuance of senior preferred
               stock                                                                                                                                       |  |                                     
|Issuance costs for senior subordinated notes, senior
               redeemable preferred
             

                        
                     stock and senior credit
               facility |  |                                     
|Purchase of treasury stock                                                                                                                                                                            |  |                                     
|Retirement of Series B Notes, including redemption
               premiums                                                                                                                            |  |                                     
|Proceeds from long-term
               obligationsother                                                                                                                                              |  | 957                                  
|Payments of long-term
               obligationsother                                                                                                                                                |  | (15,686                              
|Proceeds from (payments of) short-term
               debtnet                                                                                                                                        |  | (1,301                               
|Proceeds from stock offering, net of offering
               costs                                                                                                                                    |  | 52,727                               
|Proceeds from exercise of stock options                                                                                                                                                               |  | 38                                   
|Other, net                                                                                                                                                                                            |  | 947                                  
|                                                                                                                                                                                                      |  |                                      
|Net cash provided by (used in) financing
               activities                                                                                                                                    |  | (8,312                               
|                                                                                                                                                                                                      |  |                                      
|                                                                                                                                                                                                     
|Effect of
               exchange rate changes on cash and cash equivalents                                                                                                                           |  | (10,524                              
|                                                                                                                                                                                                      |  |                                      
|                                                                                                                                                                                                     
|Net increase (decrease) in cash and cash
               equivalents                                                                                                                                   |  | (25,227                              
|                                                                                                                                                                                                     
|Cash and
               cash equivalents, beginning of year                                                                                                                                           |  | 41,932                               
|                                                                                                                                                                                                      |  |                                      
|Cash and
               cash equivalents, end of year                                                                                                                                                 |  | $  16,705                            
|                                                                                                                                                                                                      |  |                                      
|Supplemental disclosures of cash flow
               information:                                                                                                                                    
|Cash paid during the year for interest                                                                                                                                                                |  | $  51,002                            
|                                                                                                                                                                                                      |  |                                      
|Cash paid during the year for income taxes,
               net                                                                                                                                        |  | $  14,084                            
|                                                                                                                                                                                                      |  |                                      




Noncash
             transactions:


| | During
               the years ended January 31, 2000, 1999, and 1998, property and
               equipment were acquired under capital lease financing
               transactions aggregating $331, $1,141 and $924,
               respectively.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
               the year ended January 31, 2000, accounts receivable were
               exchanged for equipment from the 50% owned China joint venture
               totaling $1,906.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Other
               noncash transactions are described in Notes 3, 10, 11, 12, 15,
               and 16.
| | ----------------------------------------------------------------------------------------------------------




See
             accompanying notes to consolidated financial
             statements.





SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS


January
             31, 2000 and 1999





(1)    Summary of Significant
             Accounting Policies





(a)   
              General Business





Samsonite
             Corporation was formerly known as Astrum International Corp.
             (Astrum). On July 14, 1995, Astrum merged with its
             wholly-owned subsidiary, Samsonite Corporation, and changed its
             name to Samsonite Corporation. Samsonite Corporation and
             subsidiaries (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. The principal customers of the Company are
             department/specialty retail stores, mass merchants, catalog
             showrooms, and warehouse clubs. The Company also sells its luggage
             and other travel-related products through its Company-owned
             stores.





(b)   
              Principles of Consolidation





The
             consolidated financial statements include the financial statements
             of Samsonite Corporation and its wholly-owned and majority-owned
             subsidiaries. All significant intercompany balances and
             transactions have been eliminated in consolidation. The
             Companys foreign subsidiaries generally have December 31
             year ends.





Minority
             interests consist of other stockholders ownership interests
             in majority-owned subsidiaries of the Company.





(c)   
              Use of Estimates





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





(d)   
              Cash Equivalents





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





(e)   
              Inventories





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





(f)   
              Investments in Affiliates





Investments
             in affiliates for which the Company owns 20% to 50% are accounted
             for under the equity method.





At January
             31, 2000 and 1999, investments in affiliates represent the
             Companys investment in Chia Tai Samsonite (H.K.) Ltd., a 50%
             owned joint venture formed to manufacture and distribute luggage
             in China.





SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





(g)   
              Property, Plant and Equipment





Property,
             plant and equipment acquired subsequent to the adoption of
             fresh-start reporting in 1993 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 future minimum lease payments. Improvements which
             extend the life of an asset are capitalized. Maintenance and
             repair costs are expensed as incurred.





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





|Buildings                      |  | 24 to 65
               years
|------------------------------ |  | -----------------------------
|Machinery, equipment and other |  | 2 to 20
               years 




(h)   
              Intangible Assets





Intangible
             assets consist of tradenames, licenses, patents and other
             intangibles and are amortized on a straight-line basis over their
             estimated useful lives which are primarily as follows:





|Tradenames                                 |  | 20 to 40
               years
|------------------------------------------ |  | -----------------------------
|Licenses,
               patents and other |  | 2 to 20
               years 




The Company
             accounts for these 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 the recorded value.





(i)   
              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.





(j)   
              Per Share Data





The Company
             computes earnings (loss) per share in accordance with the
             requirements of Statement of Financial Accounting Standards No.
             128, Earnings Per Share (SFAS 128). SFAS 128
             requires the disclosure of basic earnings per share
             and diluted earnings per share. Basic earnings per
             share is computed by dividing income available to common
             stockholders by the weighted average number of common shares
             outstanding. Diluted earnings per share is computed by dividing
             income available to common stockholders by the weighted average
             number of common shares outstanding increased for potentially
             dilutive common shares outstanding during the period. The dilutive
             effect of stock options, warrants, and their equivalents is
             calculated using the treasury stock method.





Loss before
             extraordinary item per common share and net loss per common share
             for the years ended January 31, 2000 and 1999 is computed based on
             a weighted average number of shares of common stock outstanding
             during the period of 12,124,412 and 14,416,857, respectively.
             Basic earnings per common share and earnings per common
             shareassuming dilution are the same for the years ended
             January 31, 2000 and 1999 because of the antidilutive effect of
             stock options and awards when there is a net loss from
             operations.





SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





The following
             table presents a reconciliation of the numerators and denominators
             of basic earnings per common share and earnings per common
             shareassuming dilution for the year ended January 31,
             1998:





|                                                                                                                                                                       |  | Income      |  | Shares     |  | Per
               Share
             
             Amount
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- |  | ---------- |  | ----------------------------------------------------------
|Earnings
               per common sharebasic:                                                                                                                       
|Income before extraordinary item available to common
             

                        
                     stockholders                                         |  | $56,877,000 |  | 20,235,802 |  | $2.81                                                     
|                                                                                                                                                                       |  |             |  |            |  |                                                           
|Add dilutive effect of stock options and
               awards                                                                                                         |  |            |  | 850,783    |  |                                                           
|                                                                                                                                                                       |  |             |  |            |  |                                                           
|Earnings
               per common shareassuming dilution:                                                                                                           
|Income before extraordinary item available to common
             

                        
                     stockholders plus assumed
               conversions |  | $56,887,000 |  | 21,086,585 |  | $2.70                                                     
|                                                                                                                                                                       |  |             |  |            |  |                                                           

(k)   
              Self-Insurance





The Company
             maintains self-insurance programs for certain workers
             compensation risks up to $300,000 per individual claim. The
             Company purchases excess workers compensation coverage for
             individual claims in excess of $300,000.





(l)   
              Foreign Exchange Risk and Financial
             Instruments





The
             accounts of the Companys foreign subsidiaries and affiliates
             are generally 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 gains or losses resulting from such
             translation are excluded from results of operations and
             accumulated as a separate component of stockholders equity.
             Gains and losses from foreign currency transactions are included
             in other income (expense). See Note 16.





The Company
             enters into foreign exchange contracts in order to reduce its
             economic exposure to fluctuations in currency exchange rates on
             certain foreign operations and 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). See Note 16.





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. In
             certain European countries, the Company receives negotiable trade
             acceptances as payment for goods with maturities from 60 to 90
             days from the date of issuance. These instruments are generally
             discounted to banks with recourse. At January 31, 2000,
             approximately $3,756,000 of such instruments had been discounted
             and, by the terms of their maturity dates, were uncollected by the
             holders. Any probable bad debt losses for trade receivables or
             acceptances have been reserved for in the allowance for doubtful
             accounts.





(m)   
              Accounting for Long-lived Assets





The Company
             accounts for long-lived assets in accordance with the provisions
             of Statement of Financial Accounting Standards No. 121,
             Accounting for the Impairment of Long-Lived Assets and for
             Long-Lived Assets to Be Disposed Of(SFAS 121).
             SFAS 121 requires impairment losses to be recorded on long-lived
             assets, and certain identifiable intangible assets, used in
             operations when indicators of impairment are present and the
             undiscounted future cash flows (without interest charges)
             estimated to be generated by such assets are less than the
             assets carrying amount. Impairment is measured by the excess
             of the assets carrying amount over fair value.
           SFAS 121 also requires that long-lived assets and certain
             identifiable intangibles that are expected to be disposed of be
             reported at the lower of the carrying amount or fair value less
             costs to sell.





(n)   
              Revenue Recognition





Revenues
             from wholesale product sales are recognized at the time of
             shipment, and provisions are made for markdown allowances, returns
             and discounts at the time product sales are recognized. Revenues
             from retail sales are recognized at the point-of-sale to
             consumers.





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 $16,707,000, $16,450,000, and
             $19,925,000, for the years ended January 31, 2000, 1999, and 1998,
             respectively. Royalty revenues in fiscal 1998 include
             approximately $2,200,000 from the sale of apparel trademarks in
             certain foreign countries.





(o)   
              Stock Based Compensation





In fiscal
             1998, the Company adopted Statement of Financial Accounting
             Standards No. 123, Accounting for Stock-Based Compensation
             (SFAS 123). As permitted under this standard, the
             Company has elected to follow Accounting Principles Board Opinion
             No. 25 Accounting for Stock Issued to Employees (APB
             25), in accounting for its stock options and other
             stock-based employee awards. Pro forma information regarding net
             income and earnings per common share, as calculated under the
             provisions of SFAS 123, is disclosed in Note 11.





(p)   
              Advertising Expense





External
             costs incurred in producing media advertising are expensed in the
             year incurred. Cooperative advertising costs associated with
             customer support programs are accrued when the related revenues
             are recognized. Advertising expense was approximately $50,200,000,
             $56,000,000 and $52,600,000, during the years ended January 31,
             2000, 1999 and 1998, respectively.





(q)   
              Reclassifications





Certain
             reclassifications were made to the consolidated financial
             statements for prior periods to conform to the January 31, 2000
             presentation.





(2)   
              Recapitalization





On January
             7, 1998, the Company announced it had engaged a financial advisor
             to assist in the process of exploring various strategic
             alternatives designed to enhance shareholder value. On June 24,
             1998, the Company completed a recapitalization of the Company (the
             Recapitalization) involving the repurchase pursuant to
             a tender offer for 10.5 million shares of the Companys
             common stock at a purchase price of $40.00 per share ($420 million
             in the aggregate) and the refinancing of certain existing
             indebtedness. The Company financed the Recapitalization through
             the sale of $350 million of 10 3 / 4 % senior
             subordinated notes, $175 million of 13 7 / 8 % senior
             redeemable preferred stock and warrants, and a new bank senior
             credit facility.





This
             process ultimately resulted in the Recapitalization plan. In
             addition to the charges discussed below, the Company recorded
             charges (included in selling, general and administrative expenses)
             of approximately $4.8 million during the year ended January 31,
             1999 for financial, legal and other expenses associated with the
             Recapitalization and the process of exploring alternative plans
             which were not ultimately consummated. As described in Note 11,
             the Company also recorded a $4.3 million charge to compensation
             expense during the year ended January 31, 1999 in connection with
             adjustments and modifications made to outstanding employee stock
             options.


SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)








During the year
             ended January 31, 1999, the Company completed a tender offer and
             retired $52,269,000 principal amount of 11 1 / 8 % Series B
             Subordinated Notes (the Series B Notes) representing
             99% of the outstanding Series B Notes. The Company paid a
             redemption premium and incurred other expenses totaling
             approximately $8,512,000 to complete the tender offer. These
             costs, along with $1,527,000 of deferred financing costs, were
             charged to expense and classified as an extraordinary item, net of
             tax effects, in the accompanying statement of operations for the
             year ended January 31, 1999. Also, in connection with the
             Recapitalization, deferred financing costs related to the
             refinanced senior credit facility of $380,000 were charged to
             expense and classified as an extraordinary item, net of tax
             effects, in the accompanying statement of operations for the year
             ended January 31, 1999.





(3)    Purchases of Foreign
             Distributorships





During the
             year ended January 31, 1999, the Company, through a 51% owned
             joint venture, acquired two distributors in Argentina and Uruguay.
             The joint venture paid and recorded goodwill of $2,451,000 for the
             purchase of the distributorships, and recorded a liability for the
             estimated additional purchase price due of approximately
             $1,267,000.





During the
             year ended January 31, 1998, the Company formed a subsidiary,
             Samsonite Korea Limited (SKL), which was owned 71% by
             the Company and 29% by the Companys former distributor in
             South Korea. The Company contributed $832,000 to SKL for its
             equity interest. SKL acquired the inventory, fixed assets, and
             other assets of the distributorship and recorded approximately
             $200,000 of goodwill. By agreement with its joint venture partner,
             the Company acquired an additional 9% interest in SKL effective
             October 1, 1998 for total consideration of $521,000.





During the
             year ended January 31, 1998, the Company formed a 100% owned
             subsidiary, Samsonite Hong Kong Limited (HKL), which
             purchased the assets of the Companys former Hong Kong
             distributor. The Company made investments or advances to HKL of
             $1,715,000 for the purchase of inventory, fixed assets, and other
             assets from the former Hong Kong distributor. Approximately
             $439,000 of goodwill was recorded as a result of the
             purchase.





(4)    Provision for Restructuring
             Operations





Fiscal 1999





The Company
             recorded a pretax restructuring provision in fiscal 1999 of
             approximately $2,608,000 in connection with the Torhout, Belgium
             restructuring primarily related to termination and severance costs
             for the elimination of approximately 111 positions. As of January
             31, 2000, the Torhout, Belgium fiscal 1999 restructuring was
             substantially complete. Additionally, during fiscal 1999, a
             pre-tax charge of approximately $5,606,000 (of which approximately
             $2,200,000 is non-cash) was recorded in connection with the U.S.
             Wholesale restructuring primarily related to termination and
             severance costs for the elimination of approximately 227 positions
             and costs related to the disposal of molding and other equipment
             representing excess capacity. Through January 31, 2000,
             approximately $3,901,000 has been charged against this accrual for
             such restructuring expenses. During the fourth quarter of fiscal
             1999, certain excess restructuring reserves of $1,616,000 were
             reversed including $538,000 of excess accruals related to the
             fiscal 1997 reserve and excess reserves of $1,078,000 related to
             the fiscal 1999 U.S. Wholesale restructuring. The reversal of
             excess reserves was necessary because certain expenses
             contemplated in the restructurings did not
             materialize.





Fiscal 1998





The Company
             recorded a pretax restructuring provision in fiscal 1998 of
             $3,589,000 and adjusted for excess fiscal 1997 restructuring
             accruals by $1,723,000, resulting in a net expense for
             restructuring operations in fiscal
           1998 of $1,866,000. The fiscal 1998 restructuring provision was
             provided primarily for costs associated with the involuntary
             termination of 180 manufacturing positions in Mexico and twenty
             management positions in the U.S. and is comprised of estimated
             cash expenditures of $3,283,000 and non-cash charges of $306,000.
             Through January 31, 2000, $3.6 million of costs had been charged
             against the accrual and the restructuring was substantially
             complete.





(5)    Inventories





Inventories
             consisted of the following:





|                                          |  | January 31,
|----------------------------------------- |  | -----------
|
|
|Raw
               materials and supplies |  | $  37,964  
|Work in
               process            |  | 6,338      
|Finished
               goods             |  | 127,467    
|                                          |  |            
|                                          |  | $171,769   
|                                          |  |            




(6)    Property, Plant and
             Equipment





Property,
             plant and equipment consisted of the following:





|                                                              |  | January 31,
|------------------------------------------------------------- |  | -----------
|
|
|Land                                                          |  | $  11,547  
|Buildings                                                     |  | 69,913     
|Machinery, equipment and other                                |  | 147,539    
|                                                              |  |            
|                                                              |  | 228,999    
|Less
               accumulated depreciation and amortization |  | (87,745    
|                                                              |  |            
|                                                              |  | $141,254   
|                                                              |  |            




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





|                                             |  | January 31,
|-------------------------------------------- |  | -----------
|
|
|Buildings                                    |  | $4,305     
|Machinery, equipment and other               |  | 3,865      
|                                             |  |            
|                                             |  | 8,170      
|Less
               accumulated amortization |  | (2,197     
|                                             |  |            
|                                             |  | $5,973     
|                                             |  |            




SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





(7)    Intangible Assets





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





|                                           |  | January 31,
|------------------------------------------ |  | -----------
|
|
|Tradenames                                 |  | $101,561   
|Licenses,
               patents and other |  | 7,446      
|                                           |  |            
|                                           |  | $109,007   
|                                           |  |            




(8)    Short-term
             Debt





As of
             January 31, 2000 and 1999, the Company had $7,108,000 and
             $8,409,000 of short-term debt outstanding under foreign lines of
             credit, respectively. As of January 31, 2000, the weighted average
             interest rate on foreign short-term borrowings was 9.7%. The
             European subsidiaries had unused available borrowings on foreign
             lines of credit and other foreign borrowing arrangements totaling
             approximately $60.0 million as of January 31, 2000, which are
             generally restricted for working capital purposes; however, the
             terms of the Companys senior credit facility and senior
             subordinated notes limit additional amounts which could be
             borrowed under such credit facilities.





Other
             foreign subsidiaries had approximately $0.5 million available
             under bank credit lines at January 31, 2000.





(9)    Long-term
             Obligations





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





|                                             |  | January 31,
|-------------------------------------------- |  | -----------
|
|
|Senior
               Credit Facility (a)    |  | $  83,354  
|Senior
               Subordinated Notes (b) |  | 338,050    
|Other
               obligations (c)         |  | 6,719      
|Capital
               lease obligations (d) |  | 3,818      
|Series B
               Notes (e)            |  | 532        
|                                             |  |            
|                                             |  | 432,473    
|Less
               current installments     |  | (5,379     
|                                             |  |            
|                                             |  | $427,094   
|                                             |  |            

(a)   
              Senior Credit Facility





On June 24,
             1998, the Company entered into a senior credit facility (the
             Senior Credit Facility). The Senior Credit Facility
             provides for a $100 million credit facility (the Revolving
             Credit Facility), a term loan facility in the amount of $60
             million (the U.S. Term Loan Facility) which was
             borrowed by Samsonite Corporation, and a term loan facility in the
             aggregate principal amount of Belgian francs 1,853,750,000,
             (equivalent to $50 million on the closing date of the facility)
             (the European Term Loan Facility), which was borrowed
             by Samsonite Europe N.V. The Company has the option in certain
             circumstances to add additional lenders as parties to the Senior
             Credit Facility in order to increase the Revolving Credit Facility
             by up to an additional $50 million. The Revolving Credit Facility
             and the European Term Loan Facility mature on June 24, 2003. The
             U.S. Term Loan Facility requires principal repayments in each of
             the first five years of 1.0% of the
           original principal balance and principal repayments in each of the
             sixth and seventh years of 47.5% of the original principal balance
             with the seventh payment due June 24, 2005. Borrowings under the
             Senior Credit Facility accrue interest at rates adjusted
             periodically depending on the Companys financial performance
             as measured each fiscal quarter and interest rate market
             conditions. In addition, the Company is required to pay a
             commitment fee of .50% on the unused portion of the Revolving
             Credit Facility. During fiscal 2000, the Company repaid $11.8
             million of the U.S. Term Loan Facility and $9.2 million of the
             European Term Loan Facility using proceeds from the Rights
             Offering (see Note 19). As of January 31, 2000, the Company had
             $6.3 million in letters of credit outstanding under the Senior
             Credit Facility.





At January
             31, 2000, the Company had an outstanding variable to fixed
             interest rate swap agreement with a notional amount of $25.0
             million, a pay rate of 6.14%, and a receive rate of 6.13%. The
             swap agreement dated November 8, 1999 has a two-year term and can
             be canceled by either party to the swap after one year. The
             receive rate reprices every three months.





The
             obligations under the U.S. Term Loan Facility and the Revolving
             Credit Facility are secured by inventory, accounts receivable,
             personal property, intellectual property and other intangibles of
             Samsonite Corporation, 100% of the capital stock of Samsonite
             Corporations major domestic subsidiaries, 66% of the capital
             stock of Samsonite Europe N.V. and other major non-domestic
             subsidiaries, and a mortgage on the Companys real estate in
             Denver, Colorado.





The Senior
             Credit Facility contains financial covenants which require the
             Company to maintain certain debt to earnings and interest coverage
             ratios and limitations on capital expenditures. The Senior Credit
             Facility also contains covenants that, among other things, limit
             the ability of the Company (subject to negotiated exceptions) to
             incur additional liens, incur additional indebtedness, make
             certain kinds of investments, prepay or purchase subordinate
             indebtedness and preferred stock, make distributions and dividend
             payments to its stockholders, engage in affiliate transactions,
             make certain asset dispositions, make acquisitions, and
             participate in certain mergers.





As a result
             of entering into an amended and restated bank senior credit
             facility in fiscal 1998, which had significantly different terms
             and conditions than a previous facility, the Company charged to
             expense the balance of deferred financing costs relating to the
             previous facility totaling $3,989,000 and paid prepayment
             penalties of $279,000. These charges are recorded as part of the
             extraordinary item from loss on extinguishment of debt, net of tax
             effects, in the accompanying consolidated statement of operations
             for the year ended January 31, 1998.





(b)   
              Senior Subordinated Notes





On June 24,
             1998, the Company issued and sold $350,000,000 principal amount of
             10 3 / 4 % Senior
             Subordinated Notes due 2008 (the 10 3 / 4 %
             Notes).





Interest on
             the 10 3 / 4 % Notes is
             payable in cash semiannually in arrears on June 15 and December 15
             of each year, commencing December 15, 1998. The 10 3 / 4 % Notes
             mature on June 15, 2008 and are redeemable at the option of the
             Company in whole or in part, at any time on or after June 15,
             2003, at redemption prices ranging from 100.00% to 105.375% of the
             principal amount depending on the redemption date, plus accrued
             interest. In addition, the Company, at its option, may redeem in
             the aggregate up to 40% of the principal amount of the
             10 3 / 4 % Notes
             originally issued at any time and from time to time prior to June
             15, 2001, at a redemption price equal to 110.75% of the principal
             amount thereof, plus accrued interest, with the proceeds of one or
             more equity offerings, provided that at least $210 million
             aggregate principal amount of 10 3 / 4 % Notes
             remains outstanding immediately after the occurrence of any such
             redemption. The 10 3 / 4 % Notes are
             redeemable at the option of holders thereof upon a change of
             control of the Company at a redemption price of 101% of
             liquidation preference or principal amount, as the case may be,
             plus all accumulated and unpaid interest thereon to the reduction
             date.
           During fiscal 2000, the Company repurchased and retired $12.0
             million principal amount of the 10 3 / 4 % Notes
             using proceeds from the Rights Offering (see Note 19). The
             difference between the principal amount of the 10 3 / 4 % Notes and
             the amount at which they were repurchased by the Company was
             recorded as a gain, net of deferred financing costs, and
             classified as an extraordinary item in the accompanying
             consolidated statement of operations for the year ended January
             31, 2000.





The
             indenture under which the 10 3 / 4 % Notes
             were issued contains certain covenants that, among other things,
             restrict the ability of the Company and its restricted
             subsidiaries (as defined in the indenture) to incur additional
             indebtedness, pay dividends and make certain other distributions,
             issue capital stock of restricted subsidiaries, make certain
             investments, repurchase stock, create liens, enter into
             transactions with affiliates, create dividend or other payment
             restrictions affecting restricted subsidiaries, merge or
             consolidate, and transfer or sell assets. The covenants are
             subject to a number of important exceptions.





(c)   
              Other Obligations





As of
             January 31, 2000, other obligations consist of various notes
             payable to banks by foreign subsidiaries. The obligations bear
             interest at varying rates and mature through 2004.





(d)   
              Leases





Future
             minimum payments under noncancelable capital leases, which relate
             primarily to property and equipment, and noncancelable operating
             leases, which relate primarily to retail floor space rental, at
             January 31, 2000 were as follows:





|                                                                                                         |  | Capital
             
             leases |   | Operating
             
             leases
|-------------------------------------------------------------------------------------------------------- |  | ----------------------------------------- | - | -------------------------------------------
|
|Year
               ending January 31:                                                                  
|2001                                                                                                     |  | $1,493                                    |   |                                            
|2002                                                                                                     |  | 1,305                                     |   |                                            
|2003                                                                                                     |  | 584                                       |   |                                            
|2004                                                                                                     |  | 417                                       |   |                                            
|2005                                                                                                     |  | 134                                       |   |                                            
|Thereafter                                                                                               |  | 668                                       |   |                                            
|                                                                                                         |  |                                           |   |                                            
|Total minimum lease payments                                                                             |  | 4,601                                     |   |                                            
|                                                                                                         |  |                                           |   |                                            
|Less
               amount representing interest                                                         |  | (783                                      | )
|                                                                                                         |  |                                           |  
|Present
               value of net minimum capital lease payments                                       |  | 3,818                                     |  
|Less
               current installments of minimum capital lease
               payments                |  | (1,239                                    | )
|                                                                                                         |  |                                           |  
|Long-term
               obligations under capital leases, excluding current
               installments |  | $2,579                                    |  
|                                                                                                         |  |                                           |  




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





|                               |  | Year
               ended January 31,
|------------------------------ |  | -------------------------------------
|
|
|Minimum
               rentals |  | $22,614                              
|Contingent rentals             |  | 1,281                                
|                               |  |                                      
|                               |  | $23,895                              
|                               |  |                                      

SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





Aggregate
             maturities of long-term obligations at January 31, 2000 were as
             follows (in thousands):





|Year
               ending January 31:
|--------------------------------------
|2001                                  
|2002                                  
|2003                                  
|2004                                  
|2005                                  
|Thereafter                            
|                                      
|                                      
|Obligations under capital leases      
|                                      
|Total                                 
|                                      




(e)   
              Series B Notes





Interest at
             11 1 / 8 % per annum
             on the Series B Notes is payable semiannually with principal due
             July 15, 2005. As described in Note 2, in fiscal 1999, the Company
             completed a tender offer and retired $52,269,000 principal amount
             of the Series B Notes representing 99% of the then outstanding
             Series B Notes.





As
             described in note 19, the Company completed a public equity
             offering on February 11, 1997 and used a portion of the offering
             proceeds to redeem Series B Notes and repurchase Series B Notes in
             the market. Additional Series B Notes were purchased using bank
             borrowings. A total of $137,199,000 principal amount of Series B
             Notes were retired during the year ended January 31, 1998.
             Redemption premiums of $17,277,000 paid in connection with the
             retirement of the notes and deferred financing costs of $4,563,000
             were charged to expense and classified as part of the
             extraordinary item from loss on extinguishment of debt, net of tax
             effects, in the accompanying consolidated statement of operations
             for the year ended January 31, 1998.





In
             connection with retirements of the Series B Notes, the indenture
             under which the notes were issued was amended to eliminate
             substantially all the covenants contained in the original
             indenture.





(10)    Senior Redeemable Preferred
             Stock





On June 24,
             1998, the Company issued and sold 175,000 units consisting of
             $175,000,000 aggregate liquidation preference of its
             13 7 / 8 % Senior
             Redeemable Exchangeable Preferred Stock, liquidation preference
             $1,000 per share (the Senior Redeemable Preferred
             Stock) and warrants to acquire an aggregate of 1,959,000
             shares of the Companys common stock at an exercise price of
             $13.02 per share, subject to antidilution adjustments.





The Senior
             Redeemable Preferred Stock was issued as part of the financing
             necessary to effect the Recapitalization described in note 2. The
             Senior Redeemable Preferred Stock is recorded at its liquidation
             preference discounted for unaccreted issuance costs and the value
             assigned to the warrants. The preferred stock discount is being
             accreted by charging accumulated deficit over the twelve-year term
             of the Senior Redeemable Preferred Stock.





Holders of
             the Senior Redeemable Preferred Stock are entitled to receive,
             when, as and if declared by the Board of Directors of the Company
             out of funds legally available therefor, dividends on the Senior
             Redeemable Preferred Stock at a rate per annum of 13 7 / 8 % of the
             liquidation preference per share of Senior Redeemable Preferred
             Stock, payable quarterly in arrears on each March 15, June 15,
             September 15 and December 15 commencing September 15, 1998. All
             dividends are cumulative, whether or not earned or declared, on a
             daily
           basis from June 24, 1998 and compound on a quarterly basis.
             Dividends may be paid, at the Companys option, on any
             dividend payment date occurring on or prior to June 15, 2003,
             either in cash or by the issuance of additional shares of Senior
             Redeemable Preferred Stock with a liquidation preference equal to
             the amount of such dividends; thereafter, dividends will be
             payable in cash. Dividends on the Senior Redeemable Preferred
             Stock are accrued monthly to the liquidation preference amount by
             charges to accumulated deficit for dividends expected to be paid
             by issuing additional shares of Senior Redeemable Preferred Stock.
             The dividend rate on the Senior Redeemable Preferred Stock is
             subject to increase by 2% upon the occurrence of certain events
             including the failure to pay dividends in cash after June 15, 2003
             and failure to comply with certain covenants and conditions. The
             Companys Senior Credit Facility and the indenture under its
             Notes, contain limitations on the Companys ability to pay
             cash dividends on the Senior Redeemable Preferred
             Stock.





The Company
             is required to redeem all of the Senior Redeemable Preferred Stock
             outstanding on June 15, 2010, at a redemption price equal to 100%
             of the liquidation preference thereof, plus, without duplication,
             all accumulated and unpaid dividends to the redemption date. The
             Senior Redeemable Preferred Stock is redeemable at the option of
             the Company in whole or in part, at any time and from time to time
             on or after June 15, 2001, at redemption prices ranging from 110%
             of the liquidation preference to 100% of the liquidation
             preference depending on the redemption date.





The Senior
             Redeemable Preferred Stock is exchangeable at the option of the
             Company at any time for junior subordinated debentures of the
             Company or, at the option of the Company, debentures of a holding
             company of the Company (in either case, the Exchange
             Debentures), with an interest rate equal to the dividend
             rate on the Senior Redeemable Preferred Stock, payable in cash or
             in additional Exchange Debentures at the option of the issuer
             thereof until the fifth anniversary of the issuance of the Senior
             Redeemable Preferred Stock and in cash thereafter. The Senior
             Redeemable Preferred Stock and the Exchange Debentures, if issued,
             are redeemable at the option of the holders thereof upon a change
             of control of the Company at a redemption price of 101% of
             liquidation preference or principal amount, as the case may be,
             plus all accumulated and unpaid dividends or interest thereon, as
             the case may be, to the redemption date. The Senior Redeemable
             Preferred Stock contains, and the Exchange Debentures, if issued,
             will contain, certain covenants that, among other things, limit
             the Companys ability to incur additional indebtedness, pay
             dividends and make certain other distributions, enter into
             transactions with affiliates or merge or consolidate.





(11)    Employee Stock Options and
             Awards





At January
             31, 2000, the Company has outstanding options under its 1995 Stock
             Option and Incentive Award Plan and under an employment agreement
             (now expired) with its former chief executive officer. As
             described in note 1(o), the Company applies APB 25 in accounting
             for stock options and awards. Through January 31, 2000, all
             options have been granted at exercise prices equal to or above
             fair market value at the date of grant and under terms whereby the
             exercise price and number of options granted was fixed at the date
             of grant. Accordingly, no compensation cost has been recognized
             for stock options granted through January 31, 2000, except as
             noted below.





In
             connection with the Recapitalization, the Company determined to
             adjust all options that remained unexercised after the
             Recapitalization by reducing the exercise price of each option by
             $12.50, but not to less than 25% of the average trading price of
             the Companys common stock for a ten-day period following the
             completion of the Recapitalization which was $10.00 per share. If
             the $12.50 adjustment resulted in the exercise price of an option
             being reduced to less than 25% of such average trading price or
             $2.50, the option holder had the right to receive cash in lieu of
             further reduction of the option price when such options become
             exercisable. As an alternative to accepting a $12.50 reduction in
             option price, the Company allowed holders of options to
             voluntarily surrender their options to the Company and in exchange
             receive new options to purchase a reduced
           number (approximately 42.7% fewer) of shares of Company common stock
             at $10.00 per share with the same proportional vesting schedule
             and performance criteria, if any, as the options surrendered. As a
             result of the $12.50 reduction in option prices for certain of the
             outstanding options, the Company recorded a charge to compensation
             expense during the year ended January 31, 1999 pursuant to APB 25
             of approximately $4.3 million for the difference between the
             aggregate adjusted option prices and the post-Recapitalization
             trading price of $10.00 per share. Because of the adjustments to
             option prices in connection with the Recapitalization and the
             compensation expense recorded under APB 25, the Company reflected
             a credit in its pro forma compensation expense using the fair
             value method under SFAS 123 for the year ended January 31,
             1999.





Had the
             Company determined compensation cost for the stock options
             pursuant to the fair value based accounting method consistent with
             the provisions of SFAS 123, pro forma net income (loss) per common
             share would have been as follows:





|                                                         |  | Year
               ended January 31,
|-------------------------------------------------------- |  | -------------------------------------
|
|Net
               income (loss) to common stockholders:
|As reported                                              |  | $(30,638                             
|                                                         |  |                                      
|Pro forma                                                |  | $(31,003                             
|                                                         |  |                                      
|Net
               income (loss) to common stockholders 
|per
               sharebasic:                         
|As reported                                              |  | $    (2.53                           
|                                                         |  |                                      
|Pro forma                                                |  | $    (2.56                           
|                                                         |  |                                      
|Net
               income (loss) to common stockholders 
|per shareassuming
               dilution:             
|As reported                                              |  | $    (2.53                           
|                                                         |  |                                      
|Pro forma                                                |  | $    (2.56                           
|                                                         |  |                                      




The fair
             value of each option grant is estimated on the date of grant using
             the Black-Scholes option pricing model with the following
             assumptions used for grants in the three years ended January 31,
             2000: no dividend yield for any year; expected volatility of 40%
             for fiscal year 2000, 39% for fiscal year 1999 and 29% for fiscal
             year 1998; weighted-average risk-free interest rate of 6.3% for
             fiscal year 2000, 4.8% for fiscal year 1999 and 5.5% for fiscal
             year 1998; and weighted average expected lives of 4.3 years for
             fiscal years 2000, 1999 and 1998.





Pro forma
             net income (loss) reflects only options granted in the five years
             ended January 31, 2000. Therefore, the full impact of calculating
             compensation cost for stock options under SFAS 123 is not
             reflected in the pro forma net income (loss) amounts presented
             because compensation cost is reflected over option vesting periods
             (ranging from 2 to 5 years) and compensation cost for options
             granted prior to February 1, 1995 is not considered.





Directors Stock
             Plan





In fiscal
             1996, the Company adopted the Samsonite Corporation 1996
             Directors Stock Plan (the Plan) and reserved
             200,000 shares of its common stock for issuance under the Plan.
             Under the Plan, each non-employee director may elect to receive
             common stock for directors fees valued at fair market value
             in lieu of cash. At January 31, 2000, 45,422 shares of common
             stock had been issued under the Plan.





SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





1995 and 1999 Stock Option and
             Incentive Award Plans





The 1995
             Stock Option and Incentive Award Plan (as Amended in 1996)
             (the 1995 Plan) reserves 2,550,000 shares for the
             issuance of options as determined by the compensation committee of
             the Board of Directors. The 1995 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 1995 Plan. Incentive stock options must be
             issued at exercise prices no less than the market value of the
             common stock at the date of the grant. Nonqualified stock options
             may be granted at option 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 1995 Plan may
             vest over a period of not more than ten years as determined by the
             compensation committee. At January 31, 2000, all awards under the
             1995 Plan were nonqualified stock options.





On July 15,
             1998, the Board of Directors of the Company adopted the FY 1999
             Stock Option and Incentive Award Plan (the 1999 Plan),
             which was approved by the Companys stockholders on August
             28, 1998. The 1999 Plan has 750,000 shares reserved 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 1999 Plan. As of January 31,
             2000, no awards have been made out of shares reserved for the 1999
             Plan.





Former Chief Executive
             Officers Employment Agreements





Pursuant to
             the employment contract effective May 15, 1996 with the former
             Chief Executive Officer, Richard R. Nicolosi, the Company granted
             Mr. Nicolosi options to purchase 425,532 shares of common stock at
             an exercise price of $18.25 per share. The exercise price for all
             of Mr. Nicolosis options was reduced to $5.75 per share in
             connection with the Recapitalization. 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 accelerating
             vesting. All of the Series A and Series B Options have
             vested.





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) which have all vested. The Company recognized
             compensation expense for the market value ($18.25 per share) of
             the shares at the date of grant over the two-year vesting
             period.





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





Pursuant to
             an employment agreement with another former chief executive
             officer dated April 13, 1995, certain options previously granted
             were canceled and options to purchase 653,668 shares of common
             stock (granted June 8, 1993 at market value) became fully vested
             and exercisable at $11.87 per share, as adjusted by the terms of
             the option agreement for the spinoff of the water treatment
             business. Under the employment agreement, the executive was also
             granted options for 500,000 shares of common stock at $24.85 per
             share and 1,000,000 shares of common stock at $32.85 per share, as
             adjusted by the terms of the option agreement for the spinoff of
             the water treatment business. Options for 300,000 of such shares
             lapsed. The remaining options for 1,200,000 shares of common stock
             became fully exercisable upon the cessation of the
             executives employment as of May 15, 1996. On February 11,
             1997, the executive exercised all outstanding options for a total
             of 1,853,668 shares. The exercise price was paid by the return of
             889,450 shares of common stock owned by the executive to the
             Company and cash of $6,622,139. See Note 19.





SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





Other Options and Stock
             Awards





Effective
             May 15, 1996, the Company entered into agreements (Share
             Bonus Agreements) with three executive officers to provide
             stock bonuses to each of them of 38,889 shares of common stock
             (Bonus Shares), 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 event. The shares are
             also issuable in the event of certain types of terminations. Bonus
             Shares were issued to one executive subsequent to his termination
             of employment on February 1, 1998 and the remaining compensation
             expense related to his shares was recognized at that time. The
             Company recognized compensation expense equal to the market value
             of the shares at May 15, 1996 ($18.25 per share) over the three
             year vesting period for the two remaining executives. In
             connection with the completion of the Recapitalization, the Share
             Bonus Agreements for the remaining two executives were amended to
             permit the tender of Bonus Shares to the Company. As a result, the
             Company purchased 20,026 of the Bonus Shares from each of the two
             executive officers, representing the same percentage of shares
             accepted in the Recapitalization from other stockholders. The
             remainder of the outstanding Bonus Shares became fully vested on
             May 15, 1999.





Stock Option
             Summary





A summary
             of stock option transactions follows:





|                                                                                               |  | Year
               ended January 31,
|---------------------------------------------------------------------------------------------- |  | -------------------------------------
|
|
|Outstanding at beginning of year                                                               |  | 1,615,794                            
|Granted                                                                                        |  | 798,500                              
|Exercised:                                                                                    
|By former Chief Executive
             

                        
                     Officer |  |                                     
|By others                                                                                      |  | (15,220                              
|Forfeited                                                                                      |  | (116,709                             
|Adjustments for Recapitalization (see
             
                  note 2)                  |  |                                     
|                                                                                               |  |                                      
|Outstanding at end of year                                                                     |  | 2,282,365                            
|                                                                                               |  |                                      
|Options
               exercisable at end of year                                              |  | 1,139,485                            
|                                                                                               |  |                                      
|Weighted-average fair value of options
             
                  granted during the year |  | $       
                2.38        
|                                                                                               |  |                                      




The
             following table summarizes information about stock options
             outstanding at January 31, 2000:





|                               |  | Options Outstanding |  | Options Exercisable     
|------------------------------ |  | ------------------- |  | ------------------------
|
|$2.50 to
               $8.50  |  | 1,605,386           |  | 5.8
               years
|$9.38 to
               $16.00 |  | 676,979             |  | 7.0
               years




SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





(12)    Income Taxes





Income tax
             expense (benefit) attributable to income (loss) from operations
             consists of:





|                                            |  | Current    |   | Deferred |        | Total
|------------------------------------------- |  | ---------- | - | -------- | ------ | -----
|
|Year
               ended January 31, 2000:
|U.S. federal                                |  | $         |   |          |       |      
|Foreign                                     |  | 12,603     |   |          | (27    | )    
|U.S. state and local                        |  |           |   |          |       |      
|                                            |  |            |   |          |        |      
|                                            |  | $  12,603  |   |          | (27    | )    
|                                            |  |            |   |          |        |      
|Year
               ended January 31, 1999:
|U.S. federal                                |  | $(13,829   | ) |          | 29,944 |      
|Foreign                                     |  | 7,995      |   |          | 1,876  |      
|U.S. state and local                        |  | (759       | ) |          | 1,573  |      
|                                            |  |            |   |          |        |      
|                                            |  | $  (6,593  | ) |          | 33,393 |      
|                                            |  |            |   |          |        |      
|Year
               ended January 31, 1998:
|U.S. federal                                |  | $    9,068 |   |          | 4,246  |      
|Foreign                                     |  | 7,841      |   |          | (1,108 | )    
|U.S. state and local                        |  | 1,429      |   |          | 1,612  |      
|                                            |  |            |   |          |        |      
|                                            |  | $  18,338  |   |          | 4,750  |      
|                                            |  |            |   |          |        |      




Components
             of income (loss) from operations before income taxes, minority
             interest, and extraordinary item are as follows:





|                               |  | Year
               ended January 31,
|------------------------------ |  | -------------------------------------
|
|
|United
               States   |  | $(20,060                             
|Other
               countries |  | 31,316                               
|                               |  |                                      
|Total                          |  | $  11,256                            
|                               |  |                                      




SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





Income tax expense
             (benefit) attributable to income (loss) from operations differed
             from the amounts computed by applying the U.S. federal income tax
             rate of 35% for fiscal 2000, 1999 and 1998 as a result of the
             following:





|                                                                                |  | Year
               ended January 31,
|------------------------------------------------------------------------------- |  | -------------------------------------
|
|
|Computed
               expected tax expense (benefit)                        |  | $  3,940                             
|Increase
               (decrease) in taxes resulting from:                    
|Foreign tax credits, net of valuation
               allowance                  |  |                                     
|Net impact of U.S. operating losses which do not
               provide benefit |  | 7,021                                
|Increase (reduction) in valuation
               allowance                      |  |                                     
|Tax rate differential on foreign earnings                                       |  | 1,615                                
|Deemed dividends from foreign subsidiary                                        |  |                                     
|State income taxes, net of federal
               benefit                       |  |                                     
|Adjustment of reserves related to prior years
               tax provisions    |  |                                     
|Other, net                                                                      |  |                                     
|                                                                                |  |                                      
|Income
               tax expense                                               |  | $12,576                              
|                                                                                |  |                                      




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





|                                                                                               |  | January 31,
|---------------------------------------------------------------------------------------------- |  | -----------
|
|
|Deferred
               tax assets:                                                           
|Accounts receivable valuation allowances                                                       |  | $    2,755 
|Inventory costs capitalized for tax
               purposes                                    |  | 1,415      
|Other accruals and reserves accrued for financial
               reporting purposes            |  | 32,571     
|Post-retirement benefits accrued for financial
               reporting purposes               |  | 6,385      
|Foreign tax credit carryforwards                                                               |  | 10,576     
|Net operating loss and minimum tax
               carryforwards                                |  | 72,102     
|                                                                                               |  |            
|Total gross deferred tax assets                                                                |  | 125,804    
|Less valuation allowance                                                                       |  | (80,300    
|                                                                                               |  |            
|Deferred tax assets, net of valuation
               allowance                                 |  | 45,504     
|                                                                                               |  |            
|Deferred
               tax liabilities:                                                      
|Plant, equipment and intangibles, due to differences
               as a result of fresh start |  | 41,035     
|Plant and equipment, due to differences in
               depreciation methods                 |  | 9,038      
|Other accruals and reserves                                                                    |  | 7,806      
|                                                                                               |  |            
|Total gross deferred tax
               liabilities                                            |  | 57,879     
|                                                                                               |  |            
|Net deferred tax liability                                                                     |  | $(12,375   
|                                                                                               |  |            




SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





The components of
             the net current deferred tax asset and net non-current deferred
             tax liability were as follows:





|                                                       |  | January 31,
|------------------------------------------------------ |  | -----------
|
|
|Net
               current deferred tax asset:        
|U.S. federal                                           |  | $         
|Foreign                                                |  | 3,320      
|U.S. state and local                                   |  |           
|                                                       |  |            
|                                                       |  | 3,320      
|                                                       |  |            
|Net
               non-current deferred tax liability:
|U.S. federal                                           |  |           
|Foreign                                                |  | 15,695     
|U.S. state and local                                   |  |           
|                                                       |  |            
|                                                       |  | 15,695     
|                                                       |  |            
|Net deferred tax asset (liability)                     |  | $(12,375   
|                                                       |  |            




The
             valuation allowance for deferred tax assets was decreased from
             $101,502,000 at January 31, 1999 to $80,300,000 at January 31,
             2000. A valuation allowance was provided for foreign tax credits
             totaling $16,211,000 in the fiscal 1999. For tax return purposes,
             the Company later elected to take such amounts as deductions
             rather than credits. As a result, the valuation allowance was
             reduced by $16,211,000. The remaining decrease in the valuation of
             allowance of $4,991,000 relates to expiring net operating loss
             carryforwards. The valuation allowance was increased from
             $34,888,000 at January 31, 1998 to $101,502,000 at January 31,
             1999 primarily based on an assessment of the likelihood of the
             realization of net U.S. deferred tax assets in view of (i) the net
             operating loss from book and tax purposes, (ii) expiration dates
             for tax net operating losses incurred in prior years, and (iii)
             the Companys forecasts of future taxable income taking into
             account the increased level of ongoing interest expense as a
             result of the Recapitalization.





At January
             31, 2000, the Company has net operating loss carryforwards of
             approximately $192,391,445 for federal income tax purposes,
             expiring at various dates through 2020. In 1999, the Company
             experienced a change in ownership as defined by Section 382 of the
             Internal Revenue Code. Consequently, utilization of the net
             operating loss carryforwards is subject to an annual limitation of
             approximately $9,246,000 per year, as adjusted for unused yearly
             limitations.





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 $81,167,000 and $71,860,000 as of January 31, 2000
             and 1999, respectively.





SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





(13)    Pension and Other Employee
             Benefits





The Company
             and certain subsidiaries have pension plans which provide
             retirement benefits for eligible employees, generally measured by
             length of service, compensation and other factors. The following
             tables provide combined information relevant to the Companys
             pension and other employee benefit plans:





|                                                              |  | Pension Benefits |   | Post
               Retirement
             
             Benefits
|------------------------------------------------------------- |  | ---------------- | - | ------------------------------------------------------------------
|
|
|
|Change
               in Benefit Obligation                  
|Benefit obligation at beginning of year                       |  | $199,644         |   |                                                                   
|Service cost                                                  |  | 2,065            |   |                                                                   
|Interest cost                                                 |  | 13,769           |   |                                                                   
|Plan participants contributions                              |  |                 |   |                                                                   
|Amendments                                                    |  | 3,672            |   |                                                                   
|Actuarial (gain)/loss                                         |  | (11,897          | ) |                                                                   
|Benefits paid                                                 |  | (14,982          | ) |                                                                   
|Curtailments                                                  |  |                 |   |                                                                   
|Special termination benefits                                  |  |                 |   |                                                                   
|Translation adjustment                                        |  | (416             | ) |                                                                   
|                                                              |  |                  |   |                                                                   
|Benefit obligations at end of year                            |  | 191,855          |   |                                                                   
|                                                              |  |                  |   |                                                                   
|Change
               in Plan Assets                         
|Fair value of plan assets at beginning of
               year |  | 234,265          |   |                                                                   
|Actual return on plan assets                                  |  | 27,310           |   |                                                                   
|Acquisition                                                   |  | 30               |   |                                                                   
|Employer contribution                                         |  | 194              |   |                                                                   
|Plan participants contributions                              |  |                 |   |                                                                   
|Translation adjustment                                        |  | (389             | ) |                                                                   
|Benefits paid                                                 |  | (16,351          | ) |                                                                   
|                                                              |  |                  |   |                                                                   
|Fair value of plan assets at end of
               year       |  | 245,059          |   |                                                                   
|                                                              |  |                  |   |                                                                   
|Funded status                                                 |  | 53,204           |   |                                                                   
|Unrecognized net obligation gain                              |  | 203              |   |                                                                   
|Unrecognized net actuarial gain                               |  | (80,444          | ) |                                                                   
|Unrecognized prior service cost                               |  | 4,635            |   |                                                                   
|                                                              |  |                  |   |                                                                   
|Accrued benefit cost                                          |  | $(22,402         | ) |                                                                   
|                                                              |  |                  |   |                                                                   
|Weighted Average Assumptions                                 
|Discount rate                                                 |  | 7.5              | % |                                                                   
|Expected return on plan assets                                |  | 8.5              | % |                                                                   
|Rate of compensation increase                                 |  | 3.5              | % |                                                                   




For
             post-retirement benefit measurement purposes, a 9% annual rate of
             increase in the per capita cost of covered health care benefits
             was assumed for fiscal 1999. The rate was assumed to decrease
             gradually to 5.5% for fiscal 2005 and remain at that level
             thereafter.


SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)








|                                                        |  | Pension Benefits |   | Post
             
             Retirement
             
             Benefits
|------------------------------------------------------- |  | ---------------- | - | ------------------------------------------------------------------------------
|
|
|
|Components of Net Periodic Benefit
               Costs
|Service cost                                            |  | $  2,065         |   |                                                                               
|Interest cost                                           |  | 13,769           |   |                                                                               
|Expected return on plan assets                          |  | (16,928          | ) |                                                                               
|Amortization of prior service cost                      |  | 99               |   |                                                                               
|Recognized net actuarial loss                           |  | (2,202           | ) |                                                                               
|Recognized curtailment gain                             |  |                 |   |                                                                               
|Recognized termination benefit loss                     |  |                 |   |                                                                               
|                                                        |  |                  |   |                                                                               
|Total net periodic benefit cost
               (income) |  | $(3,197          | ) |                                                                               
|                                                        |  |                  |   |                                                                               




Assumed
             health care cost trend rates have a significant effect on the
             amounts reported for the post-retirement health care plans. A
             one-percentage-point change in assumed health care cost trend
             rates would have the following effects:





|                                                                       |  | 1%
             
             Point
             
             Increase |  | 1%
             
             Point
             
             Decrease
|---------------------------------------------------------------------- |  | ----------------------------------------------------------------------- |  | -----------------------------------------------------------------------
|
|Effect on
               total of service and interest cost components |  | $  210                                                                  |  | (164                                                                   
|Effect on
               post-retirement benefit obligation            |  | $1,196                                                                  |  | (1,005                                                                 




For pension
             plans with accumulated obligations in excess of plan assets, the
             projected benefit obligation, accumulated benefit obligation and
             fair value of plan assets were $37,348,000, $36,989,000 and
             $32,830,000 as of January 31, 2000 and $34,903,000, $34,186,000
             and $32,669,000 as of January 31, 1999.





Plan assets
             are primarily invested in cash equivalents, equity securities and
             fixed income instruments.





The Company
             sponsors defined contribution plans, qualified under Section
             401(k) of the Internal Revenue Code, which are offered to certain
             groups of U.S. employees. Expense related to continuing operations
             of these plans was $783,000, $797,000 and $792,000 for the years
             ended January 31, 2000, 1999 and 1998, respectively. The plans do
             not have significant liabilities other than benefit
             obligations.





(14)    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, Accounts Payable, Short-term Debt, and Accrued
             Expenses





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





Senior Subordinated
             Notes





The Company
             estimates that the fair value of the 10 3 / 4 % Notes at
             January 31, 2000 approximates $287,000,000 based on interdealer
             transactions which were priced at approximately $85.00 per $100.00
             of principal.


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
             1(l)) is estimated by reference to market quotations received from
             banks. At January 31, 2000 and 1999, the contract value of foreign
             currency forward delivery agreements outstanding was approximately
             $35,031,000 and $73,990,000, respectively. The settlement value of
             these instruments was at that date approximately $33,172,000 and
             $75,647,000, 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.





(15)    Litigation, Commitments and
             Contingencies





Litigation





The Company
             and some of its officers, directors and shareholders have been
             named in shareholder class action lawsuits and a derivative action
             lawsuit filed between March 13, 1998 and March 9, 1999 in various
             courts, including Colorado State District Court; the United States
             District Court for the District of Colorado; and the Delaware
             Court of Chancery (together, the Litigation). On April
             9, 1999, the Company signed an agreement with a major insurance
             company that provides comprehensive insurance coverage for the
             defense and resolution of the Litigation. As part of the insurance
             agreement, the Company agreed to pay premiums ranging from an
             estimated minimum of $7.0 million to a maximum of $17.5 million,
             net of potential reimbursements, depending on the ultimate cost of
             the Litigation. The Company was responsible for paying all legal
             defense costs prior to April 9, 1999, and the insurance company is
             responsible for such costs after that date. The Company believes
             that substantially all of its costs to defend and resolve the
             Litigation are recorded in the accompanying consolidated financial
             statements as of January 31, 1999.





On December
             17, 1999, the Company and the other defendants signed a memorandum
             of understanding with the plaintiffs that contains a settlement in
             principle of the Litigation. The settlement in principle provides
             that all defendants and related parties, including Samsonite and
             its officers, directors and shareholders, will be fully released
             from all claims that were asserted or could have been asserted in
             the Litigation. The cost from the settlement in principle will be
             paid entirely by Samsonites insurance carrier. To make the
             settlement in principle final, the parties must sign formal
             settlement documents, obtain preliminary court approval, send
             notice of the settlement to class members and Samsonite
             shareholders and hold a fairness hearing. After the fairness
             hearing, the settlement must be approved by the courts. The
             parties are now negotiating formal settlement documents. There can
             be no assurance that the settlement in principle will be approved
             and completed.





Resolution of Claims with
             Respect to the Old Notes





The
             Companys 1993 reorganization plan provided for payment in
             full of 100% of the allowed claim of the holders of certain old
             notes (Old Notes) of E-II Holdings, Inc. (predecessor
             to Astrum), including approximately $16.4 million of interest on
             overdue installments of interest accruing prior to the commencement
           of the Companys bankruptcy case. 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. The Company provided for this
             contingent liability in its consolidated financial statements when
             it emerged from bankruptcy in the amount of $16.4
             million.





Prior to
             fiscal 1998, the Company settled certain of the claims on a
             favorable basis to the Company. However, as a result of a change
             in New York law in fiscal 1998, which adversely affected the
             Companys ability to favorably settle the remaining claims,
             the Company entered into an agreement to settle the remaining
             claims. The agreement was approved by the Bankruptcy Court in
             November 1999. In March 2000, the Company completed the
             distribution of funds under the settlement. Because funds
             distributed to settle the claims were less than the amount accrued
             at January 31, 2000, the Company recorded $3.5 million of other
             income during fiscal 2000. During fiscal 1998, the Company
             recorded other income of $2,060,000 from the favorable settlement
             of $2,139,000 of such claims.





Union Agreements





Union
             membership in the Companys European manufacturing plants
             varies from country to country and is not officially known.
             However, it is probable that most of the workers are affiliated
             with a union. Most European union contracts have a one-year term.
             In the United States, approximately 500 employees are unionized
             under a contract renewed every three years. The contract was most
             recently renewed in April 1999.





Other





The Company
             is a party to other legal proceedings and claims in the ordinary
             course of its business. The Company believes that the outcome of
             these other matters will not have a material adverse affect on its
             consolidated financial position, results of operations or
             liquidity.





(16)    Other Income (Expense),
             Net





Other
             income (expense), net consisted of the following:





|                                                                                                                                                                                                                                                                                                            |  | Year
               ended January 31,
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------
|
|
|Net gain
               from foreign currency forward delivery contracts                                                                                                                                                                                                                                    |  | $5,663                               
|Gain
               (loss) on disposition of assets held for sale and fixed assets,
               net                                                                                                                                                                                                      |  | (209                                 
|Equity in
               loss of unconsolidated affiliate                                                                                                                                                                                                                                                   |  | (729                                 
|Adjustment to accrual for resolution of claims with
               respect to old notes (see Note
             
                  15)                                                                                                                                                                       |  | 3,500                                
|Accrued
               costs related to shareholder litigation (see Note 15), favorable
               adjustments
             
                  to accruals and allowances related
               to previous operations and to an accrual for
             
                  taxes previously recorded |  |                                     
|Other,
               net                                                                                                                                                                                                                                                                                   |  | (4,554                               
|                                                                                                                                                                                                                                                                                                            |  |                                      
|                                                                                                                                                                                                                                                                                                            |  | $3,671                               
|                                                                                                                                                                                                                                                                                                            |  |                                      




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:





|                                                                                                                               |  | Three
               months ended
|------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------
|
|
|Net
               sales                                                                                                       |  | $175,876                         
|                                                                                                                               |  |                                  
|Gross
               profit                                                                                                    |  | $  74,659                        
|                                                                                                                               |  |                                  
|Operating
               income                                                                                                |  | $  10,014                        
|                                                                                                                               |  |                                  
|Income
               (loss) before extraordinary item                                                                         |  | $  (3,932                        
|                                                                                                                               |  |                                  
|Net
               income (loss)                                                                                               |  | $  (3,932                        
|                                                                                                                               |  |                                  
|Net loss
               to common stockholders                                                                                 |  | $(10,780                         
|                                                                                                                               |  |                                  
|Loss per
               share attributable to common stockholders-basic and
             
                  assuming dilution:
|Loss before extraordinary item                                                                                                 |  | $    (1.03                       
|                                                                                                                               |  |                                  
|Net loss                                                                                                                       |  | $    (1.03                       
|                                                                                                                               |  |                                  
|                                                                                                                              
|
|
|
|Net
               sales                                                                                                       |  | $156,676                         
|                                                                                                                               |  |                                  
|Gross
               profit                                                                                                    |  | $  59,403                        
|                                                                                                                               |  |                                  
|Operating
               income                                                                                                |  | $  (4,352                        
|                                                                                                                               |  |                                  
|Income
               (loss) before extraordinary item                                                                         |  | $  (4,703                        
|                                                                                                                               |  |                                  
|Net
               income (loss)                                                                                               |  | $(10,927                         
|                                                                                                                               |  |                                  
|Net loss
               to common stockholders                                                                                 |  | $(10,927                         
|                                                                                                                               |  |                                  
|Loss per
               share attributable to common stockholders-basic and
             
                  assuming dilution:
|Loss before extraordinary item                                                                                                 |  | $    (0.23                       
|                                                                                                                               |  |                                  
|Net loss                                                                                                                       |  | $    (0.54                       
|                                                                                                                               |  |                                  




|(a) | In the
               fourth quarter of fiscal 1999, the Company revised its estimate
               of the likelihood of the realizability of deferred tax assets
               related to U.S. operations. As a result, the valuation allowance
               for deferred tax assets was increased and accruals for tax
               reserves were reduced resulting in a net fourth quarter charge
               to income tax expense of approximately $16.7
               million.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





(18)    Information Concerning Business
             Segments





The Company
             has one line of business: the manufacture and distribution of
             luggage and other travel-related products. Management of the
             business and evaluation of operating results is organized
             primarily along geographic lines dividing responsibility for the
             Companys operations as follows: The Americas, which include
             the United States comprised of wholesale and retail operations,
             and Other Americas which include Canada and Latin
             America; Europe; Asia, which includes India, China, Singapore,
             South Korea, Taiwan and Hong Kong; and Other which primarily
             includes licensing revenues from non-luggage brand names owned by
             the Company, royalties from the Japanese luggage licensee and
             corporate overhead.





The
             accounting policies of the segments are the same as those
             described in the summary of significant accounting policies (see
             Note 1). The Company evaluates the performance of its segments
             based on operating income of the respective business units.
             Intersegment sales prices are market based.





Segment
             information for the years ended January 31, 2000, 1999 and 1998 is
             as follows:





|                                                |  | Europe     |  | U.S.
             
             Wholesale |   | U.S.
             
             Retail |         | Other
             
             Americas |        | Asia |  | Other
             
             Operations |   | Eliminations |         | Totals
|----------------------------------------------- |  | ---------- |  | ----------------------------------------- | - | -------------------------------------- | ------- | ----------------------------------------- | ------ | ---- |  | ------------------------------------------- | - | ------------ | ------- | ------
|
|2000                                           
|Revenues
               from external customers |  | $323,178   |  | 212,404                                   |   |                                        | 132,499 |                                           | 48,635 |      |  | 35,427                                      |   |              | 15,542  |       
|Intersegment revenues                           |  | $    3,907 |  | 66,658                                    |   |                                        |        |                                           | 1,886  |      |  | 8,928                                       |   |              |        |       
|Operating
               income (loss) (a)      |  | $  45,002  |  | 3,405                                     |   |                                        | 5,419   |                                           | 2,265  |      |  | 5,137                                       |   |              | (5,475  | )     
|Total
               assets                     |  | $182,763   |  | 167,269                                   |   |                                        | 31,192  |                                           | 47,716 |      |  | 26,581                                      |   |              | 200,431 |       
|Capital
               expenditures             |  | $    9,865 |  | 6,399                                     |   |                                        | 1,923   |                                           | 2,455  |      |  | 944                                         |   |              | 2,025   |       
|Depreciation and amortization                   |  | $    8,754 |  | 6,885                                     |   |                                        | 2,402   |                                           | 1,266  |      |  | 1,757                                       |   |              | 6,560   |       
|1999                                           
|Revenues
               from external customers |  | $304,986   |  | 179,577                                   |   |                                        | 128,595 |                                           | 45,588 |      |  | 22,902                                      |   |              | 15,773  |       
|Intersegment revenues                           |  | $    2,040 |  | 55,772                                    |   |                                        |        |                                           | 6,330  |      |  | 9,068                                       |   |              |        |       
|Operating
               income (loss) (a)      |  | $  39,709  |  | (32,403                                   | ) |                                        | 9,319   |                                           | 236    |      |  | 484                                         |   |              | (13,893 | )     
|Total
               assets                     |  | $185,226   |  | 131,547                                   |   |                                        | 33,004  |                                           | 48,737 |      |  | 26,581                                      |   |              | 295,656 |       
|Capital
               expenditures             |  | $  10,062  |  | 9,841                                     |   |                                        | 3,289   |                                           | 1,038  |      |  | 2,323                                       |   |              | 126     |       
|Depreciation and amortization                   |  | $  11,933  |  | 7,396                                     |   |                                        | 1,975   |                                           | 1,065  |      |  | 1,554                                       |   |              | 6,720   |       
|1998                                           
|Revenues
               from external customers |  | $277,155   |  | 269,766                                   |   |                                        | 108,896 |                                           | 40,653 |      |  | 21,881                                      |   |              | 18,524  |       
|Intersegment revenues                           |  | $    7,486 |  | 38,422                                    |   |                                        |        |                                           | 9,914  |      |  | 11,181                                      |   |              |        |       
|Operating
               income (loss) (a)      |  | $  35,627  |  | 30,701                                    |   |                                        | 6,838   |                                           | (2,312 | )    |  | (342                                        | ) |              | (2,759  | )     
|Total
               assets                     |  | $171,710   |  | 161,343                                   |   |                                        | 42,683  |                                           | 71,983 |      |  | 34,568                                      |   |              | 698,665 |       
|Capital
               expenditures             |  | $  18,650  |  | 4,616                                     |   |                                        | 4,849   |                                           | 1,328  |      |  | 6,271                                       |   |              | 599     |       
|Depreciation and amortization                   |  | $  11,600  |  | 7,651                                     |   |                                        | 1,239   |                                           | 864    |      |  | 941                                         |   |              | 9,962   |       




|(a) | 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,
               other-net, income taxes, minority interest, and extraordinary
               items. General corporate expenses and amortization of
               reorganization value in excess of identifiable assets are
               included in other operations.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | The
               Company enters into foreign exchange contracts in order to
               reduce its exposure to fluctuations in currency exchange rates
               (primarily the Belgian franc) on certain foreign operations and
               royalty agreements through the use of forward delivery
               commitments. For the years ended January 31, 2000, 1999 and
               1998, the Company had net gains (losses) from such transactions
               of $5,664,000, $208,000 and $6,463,000 respectively, which are
               included in nonoperating income (see Note 16).
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)








Long-lived assets
             relating to the Companys operations by geographic area is as
             follows:





|                             |  | January 31,
|---------------------------- |  | -----------
|
|
|United
               States |  | $  64,308  
|Belgium                      |  | 41,015     
|Other
               Europe  |  | 17,985     
|Other                        |  | 17,946     
|                             |  |            
|                             |  | $141,254   
|                             |  |            




(19)    Stock Sales





On November
             5, 1999, the Company completed a rights offering to its
             stockholders, under which the Company distributed, on a pro rata
             basis to all of its common stockholders of record as of September
             30, 1999, transferable rights to purchase additional shares of
             common stock at $6.00 per share.





The Company
             announced the rights offering for up to $75 million on April 7,
             1999. Prior to April 7, 1999, Apollo Investment L.P.
             (Apollo) beneficially owned approximately 34% of the
             Companys outstanding common stock, of which approximately
             one-half was held by Lion Advisors, L.P., an affiliate of Apollo,
             in a managed account under the terms of an investment management
             agreement with Artemis America Partnership (Artemis).
             At that time, Apollo agreed to make a bridge investment equal to
             the aggregate subscription price of rights distributable to them
             in the rights offering and to backstop the rights
             offering by purchasing a portion of the shares not subscribed for
             by other stockholders, up to a maximum potential total investment
             in connection with the rights offering of $37.5 million. Apollo
             made its bridge investment in April 1999 of $25.4 million by
             purchasing 1,000 shares of Series Z Convertible Preferred Stock
             (Series Z Preferred Stock) which was convertible into
             common stock at the rate of $6.00 per common share for a total of
             4,235,000 shares. Part of the proceeds from the bridge investment
             was used to pay the cash premium for an insurance policy covering
             various lawsuits filed between March 13, 1998 and March 9, 1999
             against the Company, related parties and former directors, and to
             pay certain costs incurred to defend these lawsuits (see Note 15).
             In consideration of Apollos agreement to make a bridge
             investment and to back-stop the rights offering, the Company
             agreed to pay Apollo a fee of $1.0 million.





On July 13,
             1999, Apollo raised the amount of its back-stop commitment by
             $12.5 million, increasing Apollos maximum potential
             investment to $50.0 million, and, in a separate agreement, Artemis
             agreed to make up to an additional $25.0 million investment in the
             Company by purchasing from Apollo, at Apollos cost, one-half
             of the shares that Apollo purchased in its bridge investment and
             one-half of any shares that Apollo was obligated to purchase under
             its back-stop commitment.





As a result
             of the rights offering, shareholders other than Apollo and Artemis
             exercised rights to purchase 846,858 shares of Samsonites
             common stock for an aggregate of $5.1 million. Additionally,
             Apollo and Artemis made an investment totaling $24.6 million under
             the back-stop obligation by purchasing an additional aggregate of
             approximately 968 shares of Series Z Preferred Stock which was
             convertible into the Companys common stock at a rate of
             $6.00 per common share for a total of 4,098,333 shares. Total
             gross proceeds from the rights offering, including proceeds from
             the bridge investment and back-stop arrangement and from the
             shareholders other than Apollo and Artemis, were $55.1 million
             before expenses of the offering.





During
             fiscal 2000, all of the shares of Series Z Preferred Stock were
             converted into a total of 8,333,333 shares of common
             stock.





SAMSONITE CORPORATION AND SUBSIDIARIES


NOTES TO
             CONSOLIDATED FINANCIAL STATEMENTS(Continued)





On February 11,
             1997, the Company completed the sale of 3,300,000 shares of its
             common stock in a public offering and received net cash proceeds
             therefrom of approximately $130,242,000. In addition, the former
             CEO (see Note 11) exercised options for 1,853,668 common shares
             and sold these shares in the public offering. The Company received
             approximately $6,600,000 in cash from the exercise of these
             options.





SAMSONITE CORPORATION AND SUBSIDIARIES


SCHEDULE
             IIVALUATION AND QUALIFYING ACCOUNTS


(In
             thousands)





|Column
               A                            |  | Column
               B |  | Column
               C |  | Column
               D |  | Column
               E |   | Column
               F
|-------------------------------------------------- |  | ----------------------- |  | ----------------------- |  | ----------------------- |  | ----------------------- | - | -----------------------
|
|Year
               Ended January 31, 2000        
|Allowance
               for Trade Receivables     |  | $  7,065                |  | 2,031                   |  |                        |  | (3,607                  | ) |                        
|Allowance
               for Long-Term Receivables |  | 521                     |  |                        |  |                        |  |                        |   |                        
|                                                   |  |                         |  |                         |  |                         |  |                         |   |                        
|Total                                              |  | $  7,586                |  | 2,031                   |  |                        |  | (3,607                  | ) |                        
|                                                   |  |                         |  |                         |  |                         |  |                         |   |                        
|Year
               Ended January 31, 1999        
|Allowance
               for Trade Receivables     |  | $  8,766                |  | 396                     |  |                        |  | (2,097                  | ) |                        
|Allowance
               for Long-Term Receivables |  | 706                     |  |                        |  |                        |  | (185                    | ) |                        
|                                                   |  |                         |  |                         |  |                         |  |                         |   |                        
|Total                                              |  | $  9,472                |  | 396                     |  |                        |  | (2,282                  | ) |                        
|                                                   |  |                         |  |                         |  |                         |  |                         |   |                        
|Year
               Ended January 31, 1998        
|Allowance
               for Trade Receivables     |  | $  7,431                |  | 4,341                   |  |                        |  | (3,006                  | ) |                        
|Allowance
               for Long-Term Receivables |  | 5,556                   |  |                        |  |                        |  | (4,850                  | ) |                        
|                                                   |  |                         |  |                         |  |                         |  |                         |   |                        
|Total                                              |  | $12,987                 |  | 4,341                   |  |                        |  | (7,856                  | ) |                        
|                                                   |  |                         |  |                         |  |                         |  |                         |   |                        




Notes:


|(a) | Amounts
               charged to costs and expenses.
|--- | -----------------------------------------------------

|(b) | Bad debt
               write-offs and charges to allowances, net of other adjustments,
               reclassifications and exchange rate changes.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------




INDEX
             TO EXHIBITS





|Exhibit |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1     |  | Distribution Agreement dated as of July 14, 1995, between
               the Company and Culligan Water
             
             Technologies, Inc.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|2.2     |  | Tax
               Sharing Agreement dated as of July 14, 1995, between the Company
               and Culligan Water
             
             Technologies, Inc.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       
|2.3     |  | Companys Second Amended Plan of Reorganization
               Under Chapter 11 of the Bankruptcy Code, dated
             
             February 17, 1993 (the Plan).2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       
|2.4     |  | Modification of the Plan, dated May 21, 1993.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       
|2.5     |  | Notice to
               holders of Senior Subordinated Notes regarding the Stock
               Elections described in the Plan.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|2.6     |  | Order of
               the United States Bankruptcy Court for the Southern District of
               New York, dated May 25,
             
             1993, confirming the Plan and authorizing and directing certain
               actions in connection therewith.3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       
|3.1     |  | Amended
               and Restated Certificate of Incorporation of the
               Company.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       
|3.2     |  | Certificate of Ownership and Merger dated July 14,
               1995.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       
|3.3     |  | By-Laws
               of the Company.4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       
|4.1     |  | Indenture, dated as of June 24, 1998, between the Company
               and United States Trust Company of New
             
             York.12                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|4.2     |  | Certificate of Designation of the Powers, Preferences and
               Relative, Participating, Option and other
             
             Special Rights of 137/8% Senior
               Redeemable Exchangeable Preferred Stock and Qualifications,
             
             Limitations and Restrictions thereof.13                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|4.3     |  | Certificate of Correction to the Certificate of
               Designation of the Powers, Preferences and Relative,
             
             Participating, Option and other Special Rights of 137/8% Senior
               Redeemable Exchangeable Preferred
             
             Stock and Qualifications, Limitations and Restrictions
               thereof.13                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|4.4     |  | Indenture, in respect of the 137/8% Junior
               Subordinated Debentures due 2010 of the Company, dated as
             
             of June 24, 1998, between the Company and United States Trust
               Company of New York.13                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|       
|4.5     |  | Form of
               Indenture, in respect of the 137/8% Senior
               Debentures due 2010 of Holdings, to be dated as of
             
             the Exchange Date, between Samsonite Holdings Inc. and United
               States Trust Company of New
             
             York.13                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       
|4.6     |  | Description of the Companys common stock, par value
               $.01 per share, and the associated preferred
             
             stock purchase rights.16                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       
|10.1    |  | Seconded
               Amended and Restated Multicurrency Revolving Credit and Term
               Loan Agreement dated as
             
             of June 25, 1998, between the Company, Samsonite Europe N.V. and
               Bank of America National Trust
             
             and Savings Association, BankBoston, N.A., and various other
               lending institutions, Bank of America
             
             National Trust and Savings Association, as Administrative Agent,
               BankBoston, N.A. as Syndication
             
             Agent, Canadian Imperial Bank of Commerce, as Documentation Agent
               and BankAmerica Robertson
             
             Stephens and BankBoston Securities Inc., as Arrangers.12
|       
|10.2    |  | First
               Amendment to Second Amended and Restated Multicurrency Revolving
               Credit and Term Loan
             
             Agreement, dated as of October 1, 1998 between the Company,
               Samsonite Europe N.V. and various
             
             other lending institutions.15                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|Exhibit |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.3    |  | Second
               Amendment and Waiver to Second Amended and Restated
               Multicurrency Revolving Credit
             
             and Term Loan Agreement, dated as of January 29, 1999 between the
               Company, Samsonite Europe
             
             N.V., and various other lending institutions.19                                                                                                      
|       
|10.4    |  | Third
               Amendment to Second Amended and Restated Multicurrency Revolving
               Credit and Term Loan
             
             Agreement, dated as of March 19, 1999, between the Company,
               Samsonite Europe N.V., Bank of
             
             America National Trust and Savings Association, BankBoston, N.A.
               and various other lending
             
             institutions.20
|       
|10.5    |  | Fourth
               Amendment to Second Amended and Restated Multicurrency Revolving
               Credit and Term Loan
             
             Agreement, dated November 5, 1999, between the Company, Samsonite
               Europe N.V., Bank of
             
             America N.A., BankBoston, N.A. and various other lending
               institutions.                                                                  
|       
|10.6    |  | Investment Agreement between Samsonite Corporation and
               Apollo Investment Fund, L.P., dated as of
             
             April 7, 1999.20                                                                                                                                                                                                                                                                                   
|       
|10.7    |  | Certificate of the Designations, Powers, Preferences and
               rights of Series Z Convertible Preferred Stock
             
             of Samsonite Corporation.20                                                                                                                                                                                                                                                                 
|       
|10.8    |  | Registration Rights Agreement, dated as of April 7, 1999,
               between Samsonite and Apollo Investment
             
             Fund, L.P.20                                                                                                                                                                                                                                                                                      
|       
|10.9    |  | Letter
               Agreement dated July 13, 1999 between Apollo Investment Fund,
               L.P. and Artemis America
             
             Partnership.21                                                                                                                                                                                                                                                                         
|       
|10.10   |  | Stockholders Agreement dated as of July 13, 1999 by and
               among Samsonite Corporation, Apollo
             
             Investment Fund, L.P. and Artemis America Partnership.21                                                                                                                                                                                                                                                
|       
|10.11   |  | Nonqualified Stock Option Agreement dated as of July 15,
               1998 between the Company and Luc Van
             
             Nevel.14                                                                                                                                                                                                                                                                                              
|       
|10.12   |  | Nonqualified Stock Option Agreement dated as of July 15,
               1998 between the Company and Thomas R.
             
             Sandler.14                                                                                                                                                                                                                                                                                          
|       
|10.13   |  | Nonqualified Stock Option Agreement dated as of July 15,
               1998 between the Company and Karlheinz
             
             Tretter.14                                                                                                                                                                                                                                                                                          
|       
|10.14   |  | Nonqualified Stock Option Agreement dated as of July 15,
               1998 between the Company and Richard H.
             
             Wiley.14                                                                                                                                                                                                                                                                                           
|       
|10.15   |  | Nonqualified Stock Option Agreement dated as of July 15,
               1998 between the Company and D.
             
             Michael Clayton.14                                                                                                                                                                                                                                                                                         
|       
|10.16   |  | Stock
               Option Agreement dated as of May 15, 1996 between the Company
               and Richard R. Nicolosi.7                                                                                                                                                                                                                                                                                                                   
|       
|10.17   |  | Form of
               Indemnification Agreement entered into or to be entered into by
               the Company with each of R.
             
             Theodore Ammon, Leon D. Black, Robert H. Falk, Thomas J. Leonard,
               Marc J. Rowan, Stephen J.
             
             Solarz, Gregory Wm. Hunt, Carl C. Ichan, Mark H. Rachesky, and
               Robert L. Rosen.3                                            
|       
|10.18   |  | Employment Agreement, dated as of February 1, 1998,
               between the Company and Thomas R.
             
             Sandler.17                                                                                                                                                                                                                                                                                                    
|       
|10.19   |  | Consulting Agreement, dated as of February 1, 1998,
               between Samsonite Europe N.V. and Luc Van
             
             Nevel.17                                                                                                                                                                                                                                                                                              

|Exhibit |  | Description                                                                                                                                                                                                                                                                                                                                        
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.20   |  | Executive
               Management Agreement, dated February 1, 1998, between the
               Company and Luc Van
             
             Nevel.17                                                                                                                                                                                          
|       
|10.21   |  | Employment Agreement, dated as of February 1, 1998,
               between Samsonite GmbH and Karlheinz
             
             Tretter.17                                                                                                                                                                                                      
|       
|10.22   |  | Overall
               Agreement, dated as of February 1, 1998, between the Company and
               Karlheinz Tretter.17                                                                                                                                                                                                                        
|       
|10.23   |  | Samsonite
               Corporation 1995 Stock Option and Incentive Award Plan (as
               Amended in 1996).9                                                                                                                                                                                                                              
|       
|10.24   |  | Samsonite
               Corporation 1995 Stock Option and Award Plan, Second
               Amendment.8                                                                                                                                                                                                                                           
|       
|10.25   |  | Stock
               Option Agreement, dated as of February 20, 1996, between the
               Company and Thomas R.
             
             Sandler.4                                                                                                                                                                                        
|       
|10.26   |  | Stock
               Option Agreement, dated as of February 20, 1996, between the
               Company and Luc Van Nevel.4                                                                                                                                                                                                                       
|       
|10.27   |  | Stock
               Option Agreement, dated as of February 20, 1996, between the
               Company and Karlheinz Tretter.4                                                                                                                                                                                                                   
|       
|10.28   |  | Registration Rights Agreement, dated as of May 15, 1996,
               between the Company and Richard R.
             
             Nicolosi.5                                                                                                                                                                                                   
|       
|10.29   |  | Stock
               Sale Agreement, dated as of May 16, 1996, between the Company
               and Richard R. Nicolosi.5                                                                                                                                                                                                                        
|       
|10.30   |  | Form of
               Agreement, made as of May 15, 1996, between the Company and each
               of Thomas J. Leonard,
             
             Luc Van Nevel, and Thomas R. Sandler, each agreement with respect
               to 38,889 shares of the Common
             
             Stock of the Company, par value $.01 per share.5
|       
|10.31   |  | Form of
               Stock Option Agreement for Awards under the 1995 Stock Option
               and Incentive Award Plan
             
             (as Amended in 1996).7                                                                                                                                                                     
|       
|10.32   |  | Samsonite
               Corporation Directors Stock Plan.9                                                                                                                                                                                                                                                                                        
|       
|10.33   |  | Purchase
               Agreement, dated as of June 13, 1996, between the Company and
               Artemis America
             
             Partnership and Apollo Investment Fund, L.P.6                                                                                                                                                      
|       
|10.34   |  | Stock
               Option Agreement, dated as of October 29, 1996, between the
               Company and Thomas R.
             
             Sandler.11                                                                                                                                                                                        
|       
|10.35   |  | Stock
               Option Agreement, dated as of October 29, 1996, between the
               Company and Karlheinz Tretter.11                                                                                                                                                                                                                   
|       
|10.36   |  | Employment Agreement, effective as of February 1, 1998,
               between the Company and Richard H.
             
             Wiley.17                                                                                                                                                                                                      
|       
|10.37   |  | Employment Agreement, effective as of February 1, 1998,
               between the Company and Carlo Zezza.17                                                                                                                                                                                                                                      
|       
|10.38   |  | Trademark
               Purchase and Assignment Agreement, dated as of October 31, 1997,
               between the
             
             Companys subsidiary, McGregor L.L.C. and McGregor
               International Licensing N.V.10                                                                                                   
|       
|10.39   |  | Trademark
               Option Agreement, dated as of October 31, 1997, between the
               Companys subsidiary,
             
             McGregor L.L.C. and McGregor International Licensing
               N.V.10                                                                                                                    

|Exhibit |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.40   |  | Rights
               Agreement, dated as of May 12, 1998, between the Company and
               BankBoston, N.A. as Rights
             
             Agent, including the Form of Certificate of Designation,
               Preferences and Rights setting forth the terms
             
             of the Series B Junior Participating Preferred Stock, par value
               $0.01 per share, as Exhibit A, the Form
             
             of Rights Certificate as Exhibit B and the Summary of Rights to
               Purchase Series B Junior Participating
             
             Preferred Stock as Exhibit C.16
|       
|10.41   |  | First
               Amendment, dated as of April 7, 1999, to Rights Agreement, dated
               as of May 12, 1998, between
             
             Samsonite and BankBoston, N.A., as Rights Agent.20                                                                                                                                                                                                                                                                                                                                                                                                                              
|       
|10.42   |  | Second
               Amendment to the Rights Agreement, dated as of July 13, 1999,
               between Samsonite and
             
             BankBoston, N.A., as Rights Agent.21                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       
|10.43   |  | Third
               Amendment of the Rights Agreement, dated as of September 27,
               1999, between Samsonite and
             
             BankBoston, N.A.22                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       
|10.44   |  | Agreement, made as of June 11, 1998, between the Company
               and Luc Van Nevel.12                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       
|10.45   |  | Agreement, made as of June 11, 1998, between the Company
               and Thomas R. Sandler.12                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|10.46   |  | Warrant
               Agreement, dated as of June 24, 1998, between the Company and
               BankBoston, N.A.14                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|10.47   |  | Common
               Stock Registration Rights Agreement, dated as of June 24, 1998,
               between the Company and
             
             CIBC Oppenheimer Corp.14                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       
|10.48   |  | First
               Amendment to Warrant Agreement, dated as of August 17, 1998,
               between the Company and
             
             BankBoston, N.A.14                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|10.49   |  | FY 1999
               Stock Option and Incentive Award Plan18                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       
|10.50   |  | Registration Rights Agreement, dated as of June 24, 1998,
               by and among the Company, CIBC
             
             Oppenheimer Corp., BankAmerica Robertson Stephens, BankBoston
               Securities Inc. and Goldman,
             
             Sachs & Co.12                                                                                                                                                                                                                                                                                                                                                       
|       
|10.51   |  | Registration Rights Agreement, in respect of the 137/8%
               Senior Redeemable Exchangeable Preferred
             
             Stock, dated as of June 24, 1998, between the Company and CIBC
               Oppenheimer Corp.13                                                                                                                                                                                                                                                                                                                                                                                                
|       
|10.52   |  | Form
               of Stock Option Agreement, dated as of March 24, 1999, between
               the Company and Thomas R.
             
             Sandler, Karlheinz Tretter, Luc Van Nevel, and Richard H.
               Wiley.                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|10.53   |  | Form
               of Stock Option Agreement, dated as of November 12, 1999,
               between the Company and Thomas
             
             R. Sandler, Karlheinz Tretter, Luc Van Nevel, and Richard H.
               Wiley.                                                                                                                                                                                                                                                                                                                                                                                                   
|       
|21      |  | Subsidiaries of the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|23      |  | Consent of KPMG LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       
|27      |  | Financial Data Schedule                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     




Note:
             Documents which are underlined above appear herein. The others are
             incorporated by reference as follows:





| | 1 | Incorporated by reference from the Registration Statement
               on Form S-4 (Registration No. 33-95642).
| | - | -----------------------------------------------------------------------------------------------------------------




| | 2 | Incorporated by reference from Application for
               Qualification of Indenture on Form T-3 (File No.
               22-24448).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------




| | 3 | Incorporated by reference from Registration Statement on
               Form S-1 (Registration No. 33-71224).
| | - | -------------------------------------------------------------------------------------------------------------




| | 4 | Incorporated by reference from the Companys Annual
               Report on Form 10-K for the fiscal year ended January 31, 1996
               (File No. 0-23214).
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 5 | Incorporated by reference from the Companys
               Quarterly Report on Form 10-Q for the three months ended April
               30, 1996 (File No. 0-23214).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 6 | Incorporated by reference from the Companys
               Quarterly Report on Form 10-Q for the three months ended July
               31, 1996 (File No. 0-23214).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 7 | Incorporated by reference from Registration Statement on
               Form S-8 filed June 7, 1996 (File No. 333-05467).
| | - | -------------------------------------------------------------------------------------------------------------------------




| | 8 | Incorporated by reference from Registration Statement on
               Form S-8 filed January 30, 1997 (File No.
               333-20775).
| | - | --------------------------------------------------------------------------------------------------------------------------------------------




| | 9 | Incorporated by reference from Proxy Statement filed May
               23, 1996.
| | - | ---------------------------------------------------------------------------------




| | 10 | Incorporated by reference from the Companys
               Quarterly Report on Form 10-Q for the three months ended October
               31, 1997 (File No. 0-23214).
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 11 | Incorporated by reference from the Companys Annual
               Report on Form 10-K for the fiscal year ended January 31, 1997
               (File No. 0-23214).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 12 | Incorporated by reference from the Registration Statement
               on Form S-4 (Registration No. 333-61521).
| | -- | ------------------------------------------------------------------------------------------------------------------




| | 13 | Incorporated by reference from the Registration Statement
               on Form S-4 (Registration Statement No. 333-61519).
| | -- | ----------------------------------------------------------------------------------------------------------------------------




| | 14 | Incorporated by reference from the Companys
               Quarterly Report on Form 10-Q for the three months ended July
               31, 1998.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------




| | 15 | Incorporated by reference from the Companys
               Quarterly Report on Form 10-Q for the three months ended October
               31, 1998 (File No. 0-23214).
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 16 | Incorporated by reference from the Companys
               Registration Statement on Form 8-A filed June 14, 1994 under the
               Exchange Act and the Companys Registration Statement on
               Form 8-A filed May 13, 1998 under the Exchange Act (File No.
               0-23214).
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 17 | Incorporated by reference from the Companys Annual
               Report on Form 10-K for the fiscal year ended January 31, 1998
               (File No. 0-23214).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 18 | Incorporated by reference from Proxy Statement filed
               August 6, 1998.
| | -- | -----------------------------------------------------------------------------------




| | 19 | Incorporated by reference from the Companys Annual
               Report on Form 10-K for the fiscal year ended January 31, 1999
               (File No. 0-23214).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------




| | 20 | Incorporated by reference from the Companys
               Quarterly Report on Form 10-Q for the three months ended April
               30, 1999.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------




| | 21 | Incorporated by reference from the Companys
               Quarterly Report on Form 10-Q for the three months ended July
               31, 1999.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------




| | 22 | Incorporated by reference from the Companys
               Quarterly Report on Form 10-Q for the three months ended October
               31, 1999.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------