Esprit drops goal of saving 100 million per year

Esprit drops goal of saving 100 million per year

Chinese clothing group Esprit will not succeed in annually cutting costs of one billion Hong Kong dollar, about a hundred million euro, by 2015. According to new CEO Jose Manuel Martinez Gutierrez they are no longer applicable.

Savings “outdated” but still continuing

The goals were set in a reorganisation plan in 2011, made by then CEO Ronald Van der Vis. They were necessary to get the onerous company, mostly active in Europe, back on the rails.

 

Esprit wanted to improve its results by closing down unprofitable activities: unprofitable production lines, unprofitable stores and even whole unprofitable countries, were left behind. The new CEO Jose Manuel Martinez Gutierrez said at an investors' day in Germany he want to keep operating costs under 50% of the turnover.

 

This financial year, which ends at the end of June, Esprit is expecting a substantial loss, mainly due to the costs for closing loss making shops and write-offs of goodwill. The company has also spent more on advertising and on upgrading the remaining shops to compete better with H&M and Zara.

 

Turnaround thanks to China

A turnaround is expected for next year at the earliest and it will not be easy: by closing a number of shops sales of the company keep on dropping. Across the first nine months of the fiscal year sales dropped by 15.5% to 20.3 billion dollar or two billion euro.

 

To turn the tide, Esprit wants to start focusing on mainland China. It wants to have sales worth of 600 million euro by 2015 in China, four times more than today. At the moment the opening of new shops is slowed down, but “once we reach a certain level, we will speed up again,” said Gutierrez.

Questions or comments? Please feel free to contact the editors


Lucas Bols drunk in love with Passoã

16/11/2017

Liquor manufacturer Lucas Bols’ turnover has grown 23.8 % in the first six months of its broken fiscal year, to 48.8 million euro. Aside from 0.5 %, the entire growth is thanks to liquor brand Passoã’s integration.

"Hunkemöller prepares IPO"

16/11/2017

According to financial press agency Bloomberg, investment company Carlyle Group ordered Rothschild bankers to prepare an IPO for Hunkemöller.

Italian Food-focused theme park opens in Bologna

16/11/2017

Fans of Italian cuisine have to head to Italian Bologna, where Eataly World opened, a theme park focused on Italian pasta, wine, pizza and more.

CEO Bernard Deryckere will leave Alpro

16/11/2017

Bernard Deryckere, who was the man behind Belgian dairy company Alpro’s international success, will leave the company after sixteen years. Apparently, he will leave because of differences of opinion with its new owner, Danone.

Ahold USA trials robot in Giant Food Store

15/11/2017

Ahold USA is currently trialing a robot in a Giant Food Store. Its job is to detect dangers and then ask for assistance. He can also point out empty shelves and check prices.

India is promised land for Belgian apples and pears

14/11/2017

India is turning into the promised land for Belgian fruit farmers. It is already Belgian apples’ most important non-European market and Belgian pears are also promoted throughout the country.

Back to top