Fashion brand Esprit has announced a restructure plan on Monday that it will lay off 40% of office staff and close stores globally to return to profit.
The company is planning to cut its five head offices in Germany to only one, while a four-floor office space in Hong Kong’s Kowloon Bay headquarters will shrink to just one floor, according to South China Morning Post and Apple Daily.
Raymond Or, executive chairman of Esprit, said the layoff will take place after Chinese New Year next year as the company needs fundamental changes to survive in a competitive market place. To further reduce cost, Esprit is now negotiating store rents globally and will close the stores which they cannot lower the rent. Or said the number of layoffs and store closures are not finalised yet, while some of Hong Kong-based staff will be asked to work in China and one to two stores will be closed.
SCMP said negotiations with landlords have begun in Germany, one of its headquarters which accounts for around half of its revenue, and will begin in February in Hong Kong.
Esprit employs over 6,400 full-time staff worldwide, down from 7,300 staff the previous year. It has also closed the flagship store in Tsim Sha Tsui in February. However, the brand is planning to strengthen its foothold in China. By 2023, Esprit will open 220 stores in China and 78 across Asia, according to a report of HK01.
Anders Kristiansen, CEO of Esprit, said Esprit will use AI to understand its 6.6 million customers in the loyalty base and offer in-demand products.