Esprit Holdings will close all its 56 stores in Asia outside mainland China to cope with horrible slump in sales during the last nine months. The situation get worsened during the March quarter when the Covid-19 pandemic hit.
Esprit will close 56 stores in Singapore, Malaysia, Taiwan, Hong Kong and Macau
The Hong Kong-listed fashion house announced that it will close 56 shops in Asia outside mainland China by June 30. Those stores represent less than 4 per cent of the group’s global turnover. The closures of all 56 stores are part of the company’s “restructuring initiatives to focus resources and recalibrate operation” during the Covid-19 pandemic.
But, its wholesale and licence business in Asia will continue as well as its joint venture business in mainland China. Esprit will focus on its core markets in Europe.
Shops are forced to temporarily close during the pandemic and it has hit the retail sector worldwide
Consumers stay at home to control the spread of the disease and shops are forced to temporarily close. Thus, retail sector are greatly affected. However, some retail firms have turned to governmental help schemes, while many are asking staff to take pay cuts or unpaid leave.
Unfortunately, others cannot sustain anymore and have to shut down such as British clothing chains Oasis and Warehouse as well as Cath Kidston.
The store closures are expected to cost between HK$150 million and HK$200 million
Anders Kristianses, chief executive of Esprit Group said they first felt the impacts in Asia and now in Europe where many of their stores have been closed. This current situation is forcing them to look at the contribution all markets make to the group’s performance. This will lead to a negative impact on the full financial year ending June 30,2020.
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