BEIJING — Esprit is shutting down 56 stores across Singapore, Malaysia, Taiwan, Hong Kong and Macau, forced by the coronavirus pandemic to streamline its operations, after placing its German subsidiary into administration in March.
“The whole industry has been affected by the global crisis. We first felt the impacts in Asia and now in Europe, where many of our stores have been closed. This is forcing us to look at the contribution all markets make to the groups’ performance,” said Anders Kristiansen, Esprit Group chief executive officer.
Company filings show the soon-to-be shuttered region represents around 4 percent of the group’s global turnover — or 267 million Hong Kong dollars, $34.5 million at current exchange.
The Asia ex-mainland China store closures are expected to be completed by the end of June. Esprit will continue its joint venture in mainland China with Mulsanne Group as well as its wholesale and license business in Asia. The brand had previously exited Australia and New Zealand in May 2018.
While Esprit does plan to continue operating in mainland China, its entire network in the region is, in fact, in the process of shutting down, too. The retailer earlier said it was closing all its stores in Mainland China by May 31 in order to reboot the brand with a new look.
One-off costs for Asia store closures excluding China is expected to be in the range of 150 million to 200 million Hong Kong dollars and is expected to weigh on the group results for the full financial year ending June 30.
For the quarter ended March 31, Esprit revenue decreased by 22.2 percent year-on-year in local currency terms to 2.37 billion Hong Kong dollars. By distribution channel, retail declined 39.8 percent, wholesale 20.1 percent, and e-commerce by 2.6 percent.
During the restructuring period, Kristiansen and the company’s chairman are forgoing their remuneration, while other senior management and non-executive directors have accepted cuts of 20 to 35 percent in fees.