Troubled Esprit To Close Hong Kong Stores

Hong Kong-listed clothing giant Esprit Holdings has announced that it will close all of its stores in Asia outside mainland China as it restructures amid the coronavirus pandemic.

The company said its 56 stores in Hong Kong, Macau, Taiwan, Singapore and Malaysia would shut their doors by the end of the year. The company earlier announced that it would wind down its own mainland operations but would continue with joint ventures there.

In a statement to the Hong Kong Stock Exchange, Esprit Holdings said it expected one-off costs for redundancies and other costs associated with the closures to be between HK$150 million and HK$200 million.

It said the stores' revenue for the nine months ending on March 31 the stores contributed revenue of HK$267 million, four per cent of its global revenue. The company will continue its Asian wholesale and licensing operations, it added.

The company said it was also negotiating with landlords worldwide, seeking government assistance where available and reducing executive salaries, with its chairman and CEO forgoing their pay during the restructuring.

Several German subsidiaries entered protective shield proceedings last month to protect them from creditors. Its first-quarter revenue fell to HK$2.37 billion, from HK$3.16 billion.