Esprit Plunges as CEO Quits Amid Push to Revive Earnings
Esprit Holdings Ltd. (330) plunged for a second day in Hong Kong trading after its chairman quit within 24 hours of the chief executive officer’s resignation.
“The moves could lead to questions regarding whether there are issues with the operation/accounts or there is a power struggle among the management team and the board,” Anne Ling, an analyst at Deutsche Bank AG, said in a note to clients.
Esprit slumped 10 percent to HK$9.45 as of 9:31 a.m. in Hong Kong, after plunging 22 percent yesterday.
The departures are the latest hurdle for the casual- clothing retailer that in September reported a 98 percent decline 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 (HMB) and Inditex SA (ITX)’s Zara lure customers away.
Hans-Joachim Koerber resigned as chairman yesterday and is replaced by Raymond Or Ching Fai, vice chairman of Hong Kong- based China Strategic Holdings Ltd. (235), Esprit said after the market closed yesterday. The retailer announced the departure of Chief Executive Officer Ronald Van der Vis on June 12.
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.
The chief executive officer’s resignation will be effective on or before July 1, 2013, in accordance with his service contract, according to Esprit.
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. Thomas Tang, previously CFO at Sino Land Co., succeeded Chew last month. The company has said it will execute transformation efforts as planned.
Esprit plunged 73 percent in Hong Kong trading last year and reported a 74 percent drop in first-half profit in February. The company got 79 percent of revenue from Europe in the 12 months ended June 2011, according to data compiled by Bloomberg.
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