Esprit’s revamp to cost US$255 million as fashion retailer wields axe on staff and stores globally
- Hong Kong-listed company posts net loss of HK$2.5 billion for the year ended June 2018, compared to a net profit of HK$67 million the previous year
Fashion retailer Esprit Holdings will take a one-off charge of HK$2 billion (US$255 million) as it lays off 40 per cent of office staff and closes stores globally in an effort to return to profit, it announced on Monday.
The Hong Kong-listed company recorded a net loss of HK$2.5 billion for the year ended June 2018, compared to a net profit of HK$67 million the previous year amid declining customer traffic and increased competition in e-commerce channels, according to its annual report.
In an effort to return to profit the company plans to cut its five head offices in Germany to just one, and a three-floor office space in Hong Kong’s Kowloon Bay will shrink to one floor.
“This exercise is going to be painful for the organisation,” said executive chairman Raymond Or Ching-fai. “We have communicated with our colleagues and I think they have understood the company needs fundamental changes in order to survive in a competitive market place.
“It is not just about cost but also about making the company more efficient and responsive to the marketplace.”