Iconic fashion brand Esprit is set to cease trading in Australia and New Zealand.
In a shock announcement made on Thursday morning, Esprit Holdings Limited said the 67 remaining stores across Australia and New Zealand would be shut down. This includes 38 concession counters and 13 off-price counters. Australia was home to 61 of the stores, with more than 350 people to be out of work as a result of the closures.
It is believed Australian stores weren’t performing as well as others around the globe. In fact, sales from this region contributed less than two per cent of revenue to the entire business last financial year. The company will now focus on Asian countries including Malaysia, Singapore, China, Taiwan and Hong Kong, which all remain popular and profitable.
According to a Nine News report, shareholders were notified with a message about what the closures meant for them.
“Divesting the ANZ operations will allow management to concentrate efforts and resources in developing other markets in Asia with profitable growth opportunities for the future, and avoid incurring further losses from our non-performing operations in Australia and New Zealand,” the notice said. “The Board considers 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 Esprit to recharge its profit potential in the Asia Pacific region.”
Although the company has headquarters in Hong Kong and Germany, it was originally founded in America by a San Francisco-based husband and wife in the 1960s. It quickly expanded and has stores in more than 40 countries worldwide. The stores have been in Australia for more than 30 years. It is believed all stores will honour gift cards until the last day of trade.
It is unclear when the closures will occur, but reports claim it will be by the end of the year. Esprit is yet to make an announcement on their social media sites. In recent years, a number of iconic brands have closed their doors in Australia. In March, Aussie Farmers Direct made headlines when it went bust. That closure impacted 100,000 customers, with the company going into voluntary administration after 13 years.
Earlier this year, Avon swiftly announced it would be exiting the Australia and New Zealand market, shocking makeup lovers and leaving thousands of Avon ladies without jobs. Dick Smith shut down all of its remaining electronic stores in 2016, while the Retail Food Group, which owns the Gloria Jeans and Donut King chains across the country, has warned that all remaining stores could soon shut down following poor results on the ASX.