Esprit admits turnaround failure, plans market exit

Global fashion retailer Esprit is pulling out of New Zealand and Australia, leaving more than 350 staff members without jobs.

The company, which was founded in California in 1968, announced on Thursday it was closing six stores in New Zealand and about 61 in Australia. The move will affect 30 staff in New Zealand, and 320 in Australia.

Esprit chief financial officer Thomas Tang said the New Zealand and Australian stores had made ‘‘a loss for some time, despite intensive efforts made by the teams in the past years to turn around its business’’.

Stephen Newnham, the director of Esprit operations in New Zealand and Australia, said the decision was ‘‘unfortunate but unavoidable’’.

Across New Zealand and Australia, Esprit has 16 retail stores, 13 factory outlets, and 38 concession counters. All stores are expected to be closed before the end of the year.

In New Zealand, it has two stores in Auckland, one in Wellington, one in Mount Maunganui, an outlet in Auckland and another in Christchurch.

Esprit is the latest in a string of fashion retailers that have struggled to make headway in New Zealand.

Over the past year, six fashion brands have collapsed in New Zealand, including Kimberleys, Topshop, Topman, David Lawrence, Marcs, and Andrea Moore.

Increased online competition from overseas retailers, changes in consumer spending, payment defaults, and extensive roadworks are among the reasons given for the downfall of these brands.

Tang said Esprit’s exit from New Zealand and Australia came off the back of low sales.

In the last financial year, sales in New Zealand and Australia totalled A$50 million (NZ$53m), representing about 2 per cent of the company’s global revenue.

Esprit would instead focus on its Asian market, Tang said.

Retail expert Chris Wilkinson said Esprit had been ‘‘in and out of the market frequently’’ over the past few decades.

‘‘Their challenge, like others that have exited the market, is that they have an undifferentiated and little-understood offer.’’

Newnham said Esprit gift cards would be honoured until the last store closed.