Esprit sees profits vanish, leaves five countries

  • Written by 
  • Published in Fashion
  •   

The financial year 2010/2011 has been the worst achievement for fashion chain Esprit in the last eight years. The Hong Kong based group saw its net profits plummet 98% and seems certain to divest its North American operations, deemed unprofitable. Esprit would also leave three European countries completely.

Exit from US, Canada, Spain, Sweden and Denmark

The chain announced its intentions to close 80 unprofitable stores in Europe and Asia, including all its stores in Spain, Sweden and Denmark. Moreover, Esprit is looking to completely leave its “home territory” North America, where the chain was founded in 1968. It is still unsure whether Esprit will close or sell their almost 100 North American stores, the solution depending on buyers' interests. 

 

The massive store divestiture was confirmed as Esprit announced its net profits had vanished in the last financial year, crashing from 4.23 billion to 79 million Hong Kong dollar (3,125 to 7.3 million euro). Analysts had expected a decrease to 3.16 billion HK dollar (293 million euro, or -26%), but apparently hugely overestimated the chain's performances.

"Neglecting the brand heritage"

In the financial year 2010/2011, ending 30 June 2011, Esprit's turnover grew marginally by 40 million HK dollar (4 million euro) to 33.77 billion HK dollar (3.129 billion euro). CEO Ronald Van Der Vis expressed concerns turnover for the current financial year might drop by as much as 5%, but remains hopeful for the future. “In essence, Esprit is a strong and profitable brand, but the brand has gradually lost its soul over the past few years,'' he said, claiming that "the heritage of the brand has been neglected and the company lost its customer focus.''

 

Leaving North America for good, Esprit will now focus on Eurasia – and China in particular. The group will invest 1.6 billion euro (18 billion HK dollar) in a “Transformation plan 2014/15”, including the opening of 200 new franchise stores and the complete renovation of all its own stores. Apart from China, the group's main focus will be the Benelux, France and Germany.  

 


Questions or comments? Please feel free to contact the editors
Lebanese group acquires Pepe Jeans

Lebanese group acquires Pepe Jeans

30/01/2015

British-Italian clothing brand Pepe Jeans has allegedly been purchase by a Lebanese group, called M1. Mere details separate the new owner from its 900 million euro purchase.

Turkish Eroglu Holding buys Mexx

Turkish Eroglu Holding buys Mexx

29/01/2015

Turkish Eroglu Holding has acquired fashion brand Mexx and plans to relaunch several dozen stores all across Europe. The financial details have not been divulged, while negotiations about the Belgian...

"Indifun acquisition of Veritas imminent"

"Indifun acquisition of Veritas imminent"

28/01/2015

Earlier this month, it became clear that there were two possible buyers for Veritas, the Belgian retailer, and it seems that investment firm Indufin is now close to the chain's...

Sports brand Asics releases its Tiger again

Sports brand Asics releases its Tiger again

28/01/2015

Japanese sports brand Asics is relaunching its legendary Tiger brand as it intends to produce 30 new items as part of the brand.

Board replacements for Mango

Board replacements for Mango

28/01/2015

Spanish fashion group Mango will replace several high-level board members, particularly its CEO and CFO. Its current CEO, Enric Casa, will retire after nearly 20 years at the top of...

Miss Etam wants lower rental prices

Miss Etam wants lower rental prices

28/01/2015

Dutch fashion chain Miss Etam has asked its store owners to lower the rental price, something V&D has also asked. According to experts, store rental prices are way too high...

Extensive growth for H&M

Extensive growth for H&M

28/01/2015

Swedish fashion chain H&M has had an extremely successful 2014, with an 18 % turnover growth and a 17 % net profit growth. The company aims to keep expanding its...

Adidas sells American shoe brand Rockport

Adidas sells American shoe brand Rockport

26/01/2015

German sports products manufacturer Adidas has reached its (adjusted) 2014 profit forecast and has even managed a decent profit growth. On top of that, it has sold its American shoe...

"Dutch fashion retailer Mexx close to relaunch"

"Dutch fashion retailer Mexx close to relaunch"

26/01/2015

Bankrupted Dutch fashion company Mexx is facing important days as its Dutch guardian has stated he feels a relaunch is imminent. Mexx was declared to be bankrupt in December, creating...

Etam sales up slightly

Etam sales up slightly

26/01/2015

French fashion group Etam has managed a 2014 turnover of 1.22 billion euro, up 0.4 % from last year. The year consists of a decent first six months, a disappointing...

HOM becomes part of Huber Group

HOM becomes part of Huber Group

21/01/2015

French men's brand HOM has joined the Huber Group, after a 28-year long stint with Triumph Group. The latter had decided to reorient its brand portfolio, which meant that HOM...

Tommy Hilfiger's digital showroom is world exclusive for Amsterdam

Tommy Hilfiger's digital showroom is world exclusive for Amsterdam

21/01/2015

American clothing brand Tommy Hilfiger has opened a digital showroom in Amsterdam, designed as a cheaper and simpler alternative for business clients to compile a collection of the brand's products.