Hong Kong-based fashion group, Esprit Holdings Ltd. has become the latest victim of Australia’s struggling fashion retail sector over the past 12 months. The retailer has now decided to shut its all lossmaking 67 stores in Australia and New Zealand. The closure of these stores will result in job loss for around 350 people.
Before Esprit, David Lawrence and Marcs, Oroton, GAP, Pumpkin Patch and Specialty Fashion Group have suffered losses in Australia.
Stehen Newnham local director of operations has termed it an unfortunate but unavoidable decision to shut 16 retail stores, 13 factory outlets and 38 concession stores inside department store Myer.
The cost-saving post closure of stores in Australia and New Zealand will help Esprit to focus on Singapore, Malaysia, China, Hong Kong, Tawain and other key Asian markets.
It is being speculated that provisions for store closures and the impairment of store assets will help the retailer to save around HK $ 200 million in one-off costs.
Notably, the fashion retailer noted HK $ 297 million in revenue from Australia and New Zealand markets in fiscal 2017. The revenue generated from these regions was less than 2 per cent of its total revenue.
The Board of Directors of Holdings Limited reportedly believes that the rationalisation of the distribution footprint continues to be paramount in order to improve our bottom line, and that the intended divestment of the ANZ operations will allow it to recharge its profit potential in the Asia Pacific region.
The brand, established in 1968, and made its entry into the Australian market in early 1980. In September last year, the retailer announced that it is considering to shut its underperforming retail stores.
