Tumi shares fall on stockholders' plan to sell
NEW YORK -- Shares of Tumi, which makes pricey luggage, fell Tuesday after the company said some shareholders, including the company's CEO and CFO, plan to sell stock.
THE SPARK: Tumi Holdings Inc. said in a regulatory filing that a group including CEO Jerome Griffith and CFO Michael Mardy, along with European private equity firm Doughty Hanson, will sell 10.1 million shares. The banks managing the offering may buy an additional 1.5 million shares.
Doughty Hanson is Tumi's biggest shareholder, with a nearly 59 percent stake, and owned the luggage maker before its initial public stock offering in April.
Stock sales by large shareholders are common in the months after an IPO.
THE BIG PICTURE: Tumi, best known for its black travel bags and business cases that it began making in 1983, sells luggage through its stores and other retailers.
It currently has nearly 68 million shares outstanding, so a big stock sale could make its remaining shareholders' stakes less valuable.
Following the offering, Doughty Hanson will own 44 percent of the company's outstanding common stock, or 42 percent if the managing banks buy all 1.5 million additional shares, the company said.
It was unclear how much of their holdings Griffith and Mardy intend to sell. A spokeswoman for Tumi did not immediately return an email seeking clarification.
Tumi will not receive proceeds from the sale.
SHARE ACTION: Down $1.08, or 4.7 percent, to $22.11 in midday trading. The South Plainfield, N.J., company went public at $18 per share, and had gained nearly 29 percent since its IPO.