Esprit was considered a trendy brand in the 1990s.
Jeffrey Greenberg/Universal Images Group via Getty Images
Esprit Holdings, a Hong Kong-based fashion retailer that once had a global presence and was popular, has hired a privately held international private equity firm to help the company turn its business around. The company's stock price soared 150% in the past two days as it announced it was in negotiations. Europe's struggling companies.
Esprit announced Wednesday in a filing with the Hong Kong Stock Exchange that the private equity firm has expressed interest in submitting a non-binding proposal for a potential partnership. The apparel retailer said the deal includes the private equity firm taking control of Esprit's European operations and helping it restructure and turn around. It added that the company was also interested in investing in Esprit.
The announcement came two days after Esprit announced that its Belgian subsidiary had filed for bankruptcy in a European regional court. The company blamed the Belgian unit's bankruptcy on high energy and logistics costs, negative consumer sentiment and high rents, adding that the closure was “inevitable”. The company's Swiss subsidiary also filed for bankruptcy in March.
Esprit, once a blue-chip Hong Kong company selling clothing that was considered trendy in the 1990s, is trying to make a comeback but has so far suffered mounting losses. Esprit said in its earnings report that its 2023 net loss widened to HK$2.3 billion ($290 million) from HK$882 million a year earlier. Revenue for the company, whose retail and wholesale business accounts for more than 60% in Europe, also fell 16% year-on-year to HK$5.9 billion.
Michael Yin is the former chairman of Esprit.
Antony Dixon/South China Morning Post via Getty Images
Founded in San Francisco in 1968, Esprit took off after Hong Kong businessman Michael Yin, who was its lead procurement agent, bought the company from co-founders Susie and Doug Tompkins in 1989. . Under Yin's leadership, Esprit grew from a small company. -A brand known as a global fashion house with a presence in Europe, America, and Asia. The company was listed on the Hong Kong Stock Exchange in 1993, and in 2007 its market capitalization reached HK$161 billion. The success of Esprit catapulted Ying to billionaire status in his 2004 year.
The 2008 global financial crisis took a toll on Esprit's business, and the company has since struggled to regain success amid increasing competition from fast fashion brands such as Zara and H&M. After Yin resigned as chairman in 2006, he sold most of his shares in Esprit. Mr Ying remains one of the richest people in Hong Kong, with a net worth. forbes Estimated at $2.2 billion.
Over the past decade, Esprit has been forced to exit some markets in North America, Australia, Asia and Europe. The company's stock price has now fallen 99.7% from its peak of HK$111.8 in 2007. The company is currently led by CEO William Pack and his wife, Chairman Christine Chiu. Both Park and Chiu are trained lawyers. Esprit's current shareholders include Karen Lo of the Lo family, which runs Vitasoy International, one of Hong Kong's leading manufacturers of plant-based food and beverages.
