Fashion brand Esprit says goodbye to its 56 stores in Asia: the chain will only remain active with its own retail network in China, even though the company is listed in Hong Kong. The group has also already applied for protection against creditors.
Asian turnover halved
Esprit will close all of its 56 stores in Hong Kong, Macao, Malaysia, Singapore and Taiwan by 30 June: only the stores in mainland China will be spared, although they will also be downsized. The fashion brand is restructuring to "meet the challenges of the pandemic", The Star reports.
Esprit's Asian sales fell 52.2 % in the past quarter: 61.3 % in stores and 54.9 % at wholesale level. Online sales increased by 13.9 %. Meanwhile, sales in Europe fell by 22.2 %, with 36.2 % in retail and 22.5 % in wholesale. Remarkably, online sales also fell by 7.1 %. In total, worldwide turnover decreased by 25 %.
Over the nine months ending in March, there is little good to say: total turnover fell by 18.1 %. Sales in Asia fell by 44.2 %, with the 56 stores that will have to close for good accounting for around 4 % of total group sales. Esprit argues that the "pandemic and lockdown have negatively affected sales results in all distribution channels", but in truth, sales were already in freefall.
Focus on Europe
The fashion brand, originally from the United States, will continue its joint venture activities in China, as well as its wholesale and licensing activities in Asia. Furthermore, the company intends to focus on its core markets in Europe. In the meantime, the company is negotiating with landlords to obtain rent reductions for the stores that remain open.
The decision in Asia comes only one month after Esprit applied for protection against creditors for its six German companies in order to restructure. The clothing label wants to focus on Europe, with fewer staff and fewer stores. Meanwhile, the management team has given up 35 % of its salary, while the two vice-presidents have agreed to a 25 % pay cut.