Esprit, weighed down by a dismal performance in 2023, acknowledges uncertainty about its future

Despite its efforts at revival, Esprit continues to struggle. Operating between Hong Kong—where it is listed—Germany, and the United States, the fashion brand reported a 16.3% decrease in activity in 2023, amounting to HK$5.912 billion (approximately €700 million). During the fiscal year ending December 31, 2023, the company witnessed a dramatic increase in losses, soaring from HK$664 million in 2022 to HK$2.339 billion (€277 million) last year—an astounding surge of 252%.

This critical situation prompts the company to question its sustainability. It concedes to “significant uncertainty about the group’s ability to continue its operations,” as stated in a press release. It’s worth noting that on March 25, Esprit filed for bankruptcy for its directly-operated network of stores in Switzerland.

Throughout 2023, the company, established in 1968, struggled amidst a challenging retail environment in Europe, characterized by consumer pessimism, inflationary concerns, declining sales, and mounting cost and liquidity pressures.

In an effort to reverse course, the management team has announced a series of measures, including financial restructuring and significant cost reduction across all areas, which may also involve “adjusting its human resources,” although no specific figures are provided. Additionally, Esprit aims to explore new export markets and strengthen its presence in the United States.

In Europe, Esprit’s sales declined by an average of 17.9%. In its primary market, Germany, the decline reached 18.7%, while its turnover in France plummeted by 21% over the year. To showcase the evolution of its collections towards a more premium segment and attract the younger generation, the brand recently opened a pop-up event at the Printemps Haussmann atrium earlier this year.

Esprit, once a prominent player in the 1990s/2000s, recorded a 15% drop in e-commerce sales last year, a 20% decline in wholesale activity, and a 14% decrease in its retail network, while its licensing activities remained stable. The brand, currently employing nearly 2,300 people globally, relies on approximately 1,700 points of sale worldwide (including corners and multi-brand retailers).

In conjunction with these results, a departure was announced: that of executive director Wolfgang Paul Josef Schlangmann. Simultaneously, Anthony Nicola Strippoli has assumed the role of executive director, having served as the group’s director of operations for the Americas since January 2024.

For the year 2024, the company aims to continue implementing its transformation and streamlining plan, although it anticipates grappling with continued uncertainty in economic and geopolitical realms.