Esprit to shut all Aussie stores
FASHION retailer Esprit will close all 67 of its loss-making Australia and New Zealand stores as the Hong Kong-listed company shifts focus to more profitable regions.
It was not immediately clear how many staff would be affected by the closures. "The group's decision is unfortunate but unavoidable," local director of operations Stehen Newnham told AAP.
In an announcement to the Hong Kong Stock Exchange on Wednesday, Esprit Holdings Ltd said it would divest the ANZ arm "in order to strengthen its foundation for the business".
"Divesting the ANZ operations will allow management to concentrate efforts and resources in developing other markets in Asia (e.g. China, Hong Kong, Taiwan, Singapore and Malaysia) with profitable growth opportunities for the future, and avoid incurring further losses from our non-performing operations in Australia and New Zealand," the company said.
"The intended divestment involves closing down 67 directly managed retail stores, including 38 concession counters in department stores and 13 off-price outlets."
Esprit said for the financial year ended 30 June 2017, ANZ contributed $50.5 million ($HK297 million) to the group's revenue, representing less than 2 per cent of the total. The closure is expected to incur one-off costs of between $25.5-34 million ($HK150-200 million).
"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," it said.
Esprit is just the latest in a long line of victims in Australia's struggling fashion retail sector over the past 12 months, including David Lawrence and Marcs, Oroton, Gap, Pumpkin Patch, and Specialty Fashion Group, the company behind brands including Katies, Millers and Rivers.