HONG KONG — Following years of slumping sales, José Manuel Martínez Gutiérrez is stepping down from the chief executive officer role at Esprit, the affordable apparel chain, with Anders Kristiansen named his successor.
The move, effective June 1, was detailed in an announcement to the Hong Kong Stock Exchange on Wednesday. Raymond Fai, who has been with the company in a non-executive role, has been appointed to executive chairman of the board and executive director effective April 1.
Gutiérrez’s departure comes after another set of disappointing results, leaving the brand in the red, and follows the shuttering of its flagship store in Hong Kong, confirming a January report in WWD.
A former Inditex executive, Gutiérrez was appointed ceo in September 2012 and tasked with the chain’s turnaround. He set out to refine its image and products, while also taking steps to verticalize the business and increase speed-to-market. While some of the changes were well received, such as the 2016 special collaboration with Opening Ceremony, the group has mostly been unable to resuscitate the brand.
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The company remains saddled by its wholesale accounts and has almost all but withdrawn from the Chinese market. In the six months ended Dec. 31, the business registered a loss of 954 million Hong Kong dollars, mainly due to the write down of its China business, as revenue dipped 3.4 percent to 8.04 billion Hong Kong dollars.
Esprit declined to comment beyond its financial filings, which said: “We very much regret losing Mr. Martínez as his contribution has been most valuable to Esprit. Over the past five years, he reversed a severe declining trend of the group’s results by stabilizing operations, restructuring the organization, and improving overall profitability. After this phase of bottom line recovery is completed, the group enjoys a sound financial position, with no debt and net cash of 4,575 million Hong Kong dollars as of Dec. 31, 2017. This healthy financial situation enables a new phase focused on driving top line performance in the coming years. We would like to wish Mr. Martínez all the best in his future endeavors.”
Incoming ceo Kristiansen, 51, is an industrial adviser for the private equity firm Permira, but before that served as boss of British retailer New Look. The Danish executive led the company over a period of more than five years, which saw the high-street retailer acquired by South African group Brait in 2015, although it too has been plagued by profitability issues.
“Our objective will be to recapture market share and ultimately return the company to growth,” Kristiansen said of his new role.
According to financial filings, Kristiansen will draw a base yearly salary of 1.4 million euros with a discretionary bonus equivalent to that amount, in addition to a car allowance and shares in the company. Soon-to-be chairman Or is entitled to a yearly salary of 11 million Hong Kong dollars (about $1.4 million) and a guaranteed bonus of 4.5 million ($573,525) per year.