BERLIN — Esprit suffered a second major management setback Wednesday with the resignation of the company’s chairman and independent non-executive director Hans-Joachim Körber. Esprit chief executive officer Ronald Van der Vis stepped down from his post on Tuesday, sending Esprit’s shares into a tailspin.
This story first appeared in the June 14, 2012 issue of WWD. Subscribe Today.
Prior to the announcement of Körber’s departure, the Hong Kong-listed company suspended trading from 1:30 p.m. Wednesday, June 13, to 9 a.m. Thursday, June 14, Hong Kong time. Shares dropped 22 percent to close at 10.54 Hong Kong dollars, or $1.36 at current exchange, prior to trading being suspended.
Esprit also announced that Raymond Or Ching Fai, an independent non-executive director of the company, has been appointed chairman effective Wednesday.
Commenting on Van der Vis’ departure, Aaron Fischer, analyst at CLSA in Hong Kong, said he viewed it as “a significant negative.”
The ceo “developed a very credible sounding transformation plan, hired strong people and the initial execution seemed to be on track,” Fischer said. “Also, Ronald brought a tremendous amount of enthusiasm to the role and was well liked by investors.”
Fischer maintained an “underperform” rating on Esprit shares, citing difficulty of executing the turnaround of a mass market brand and concern that material recovery in earnings will take longer than the market expects. Moreover, the deteriorating macro situation in Europe will weigh on the stock, given that Esprit generates 80 percent of sales in Europe.