International fashion brand, Esprit is the latest victim of Australia’s highly competitive retail industry, as it announces it will be closing all of its operations in Australia and New Zealand by the end of the year.
In a letter to shareholders, Esprit announced its decision to call it quits in the ANZ region, after failing to turn around the loss-making business. Among the closures will be 67 directly managed retail stores, including 16 bricks-and-mortar stores, 13 factory outlets, and 38 concession counters, as well as its local online store.
According to Executive Director and Group CFO, Thomas Tang, the move was a long time coming.
“Esprit’s operations in Australia and New Zealand have been loss-making for some time, despite intensive efforts made by the teams in the past years to turnaround its business.
“In order to strengthen our foundation, the Group intends to withdraw from these markets to allow us to concentrate efforts and resources to develop other markets in Asia,” Tang said.
The global retailer has had operations in Australia since the 1980s, but despite its strong brand presence, local sales only accounted for roughly two percent of the group’s overall revenue in 2017.
The company expects the move to close down its ANZ operations will result in a direct financial hit for the end of the 2018 financial year, but that it will be a one-off cost that is paramount to improving the Hong Kong and German-based businesses bottom-line.
The businesses Local Director of Operations, Stehen Newnham said, “The group’s decision is unfortunate but unavoidable”.
“Our thanks go to our highly committed, loyal and passionate employees, and to our customers who have supported the Espirit brand,” he said.”
While the retailer is expected to cease all ANZ operations by the end of 2018, representatives have said the retailer is committed to fulfilling its obligations to all of the employees who will be affected.
Never miss our best stories. Sign up for Power Retail’s free weekly newsletter and find our daily stories on Facebook, Twitter, LinkedIn, and Instagram.