Hong Kong-based retailer Esprit is shutting all its stores in mainland China by May 31, including the newly unveiled flagship in Beijing, in order to reboot the brand under the newly formed China joint venture with Mulsanne Group, a men’s wear manufacturer backed by L Catterton.
Yong Yu, founder and chief executive officer of Mulsanne Group, revealed the decision with Jiemian, a Chinese news agency.
“The brand’s transformation in the past hasn’t achieved great success. We will reshape Esprit’s existing positioning, channels and products,” he said.
“We hope that Esprit will be completely different from now, in terms of channels, pricing, brand image and consumer portraits. Product design will be done by us. For the stores, instead of doing big stores like H&M and Zara, we will adjust to 100- to 200-square-meter stores in shopping malls targeting the new generation,” he added.
Heavy markdowns are happening across its sales channels. Its Tmall store and WeChat stores introduced up to 80 percent off discounts from early April. Its outlet units in Beijing and Shanghai are offering 90 to 95 percent off.
Esprit’s store in Shanghai Bailian Zhonghuan Commerce Plaza revealed its closure on WeChat from April 16, while several stores in Beijing also confirmed they will cease operations soon. Esprit’s WeChat official account also said its membership program will terminate on May 31.
Mulsanne Group and Esprit contributed 60 percent and 40 percent, respectively, of capital to the China joint venture, which was established last December. The deal covers mainland China and excludes Hong Kong SAR, Macau SAR and Taiwan region.
Founded in 2007, Mulsanne operates five brands. They are Gxg, Gxg Jeans, Gxg.kids, Yatlas and 2Xu, an Australian sportswear brand that is also backed by L Catterton. The company filed for an initial public offering on the Hong Kong Stock Exchange in 2019.