Execs' quitting hits Esprit revival plans
Source: Bloomberg News |
June 14, 2012, Thursday
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Print Edition
Print Edition
ESPRIT Holdings Ltd yesterday reported the resignation of its chairman a day after CEO Ronald Van der Vis quit, jeopardizing the apparel retailer's turnaround plans.
Esprit stock slumped 22 percent to HK$10.54 (US$1.36), its biggest drop since October 1997, before trading in the shares was suspended in Hong Kong. Hans-Joachim Koerber resigned as chairman and Raymond Or Ching Fai took over effective yesterday, Esprit said after the market closed, after announcing on Tuesday Van der Vis is leaving.
The departures are the latest hurdle for the company that in September reported a 98 percent slump in fiscal year profit and said its brand had "lost its soul." Van der Vis, a 44-year-old Dutchman, had been trying to boost China revenue and improve designs as Hennes & Mauritz AB and Inditex SA's Zara lure customers away.
"The unexpected resignation" of Van der Vis "is a serious blow to the company's transformation plan and will cast doubt on the execution," said Andrew Sullivan, principal trader at Piper Jaffray Asia Securities Ltd in Hong Kong. "Investors may fear that his stepping down will bring the transformation efforts back to square one."
Van der Vis is leaving as the company started showing some improvement in same-store sales. The retailer in May said revenue at outlets open more than a year grew 0.5 percent in the three months ended March after dropping 4.6 percent in the six months to December 31.
"I am very shocked at his departure at this point in time," said Gabriel Chan, a Hong Kong-based analyst at Credit Suisse Group AG. "The transformation plan is going quite well, at least they had a good start with improvement in sales growth."
Van der Vis, who joined the company in 2009, announced his departure a little more than six months after the resignation in December of Chief Financial Officer Chew Fook Aun.
Esprit stock slumped 22 percent to HK$10.54 (US$1.36), its biggest drop since October 1997, before trading in the shares was suspended in Hong Kong. Hans-Joachim Koerber resigned as chairman and Raymond Or Ching Fai took over effective yesterday, Esprit said after the market closed, after announcing on Tuesday Van der Vis is leaving.
The departures are the latest hurdle for the company that in September reported a 98 percent slump in fiscal year profit and said its brand had "lost its soul." Van der Vis, a 44-year-old Dutchman, had been trying to boost China revenue and improve designs as Hennes & Mauritz AB and Inditex SA's Zara lure customers away.
"The unexpected resignation" of Van der Vis "is a serious blow to the company's transformation plan and will cast doubt on the execution," said Andrew Sullivan, principal trader at Piper Jaffray Asia Securities Ltd in Hong Kong. "Investors may fear that his stepping down will bring the transformation efforts back to square one."
Van der Vis is leaving as the company started showing some improvement in same-store sales. The retailer in May said revenue at outlets open more than a year grew 0.5 percent in the three months ended March after dropping 4.6 percent in the six months to December 31.
"I am very shocked at his departure at this point in time," said Gabriel Chan, a Hong Kong-based analyst at Credit Suisse Group AG. "The transformation plan is going quite well, at least they had a good start with improvement in sales growth."
Van der Vis, who joined the company in 2009, announced his departure a little more than six months after the resignation in December of Chief Financial Officer Chew Fook Aun.
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