Esprit to close stores in Australia and New Zealand
The Esprit fashion brand has announced plans to divest its loss-making operations in Australia and New Zealand.
The company said the move will mean it will avoid incurring any further losses and will enable it to focus on developing other markets in China, Hong Kong, Taiwan, Singapore and Malaysia.
Esprit said: “The board considers that the rationalisation of the distribution footprint continues to be paramount in order to improve our bottom line, and that the intended divestment of the ANZ operations will allow Esprit to recharge its profit potential in the Asia Pacific region.”
As part of the plan, Esprit will close down 67 directly managed retail stores, including 38 concession counters in department stores and 13 off-price outlets. For the financial year ended 30 June 2017, the Australian and New Zealand operations contributed HK$297 million to the group’s revenue, which is less than 2% of the total.
Esprit estimates that one-off costs resulting from the divestment, including the provision for store closures and the impairment of stores assets, will be in the range of HK$150 million to HK$200 million. This is expected to have a negative impact on its results for the financial year ending 30 June 2018.
