Esprit Holdings, the Hong Kong-listed fashion retailer struggling to recover from an earnings slump, may close all its stores in North America, if it fails to find a buyer or licence partner for the unprofitable business.
The company, which was founded by Susie and Doug Tompkins in San Francisco in 1968, said it 'intends to focus on finding one or more licence partners to maintain and reinvigorate the presence of the Esprit brand.'
However it will have to close all stores in North America if no one is interested in taking them over, a spokesman of the company said in an emailed statement yesterday.
Esprit's US and Canadian subsidiaries haven't decided on whether to file for Chapter 11 (or equivalent Canadian) proceedings, he added.
Esprit currently operates around 90 stores in Canada and the United States, among its 1,100-plus stores worldwide.
'We are not surprised they have found it difficult to find a buyer for the stores as the US retail market remains in a difficult position,' said Aaron Fischer, head of consumer and gaming research at CLSA.
The company made provision for the possible store closures in its annual report for the year to last June, estimating the divestment cost in North America would total around HK$1.268 billion.