I love the squeaky leather handles, just what good leather does.
As for the smell, try airing it out for a few days and if that doesn't do it completely then you could try aquarium charcoal. I bought a bag off of EBay that had a horrible perfume smell and after trying everything I tried the charcoal. Bought a jar of the loose stuff and poured (carefully) into a small dish and sat it in the bag and it has just about cured the odor. But of course, I had to take drastic measures as I was stuck with the bag but in your case you could always just return it.