Esprit set to sell Greater China brand rights, assets

Failing fashion label Esprit says it is in “the final stages of negotiations” with an independent third party to sell various assets across Greater China. 

In a deal it says is worth US$47.5 million, the Hong Kong-headquartered fashion retailer would hand over trademarks and its main domain names in Mainland China, Hong Kong, Macau and Taiwan. The unidentified buyer would pay $10 million if the deal is finalised. 

“Recently, the company has received several proposals and offers from various independent third parties regarding potential cooperation and/or investments that could benefit the group,” said chairperson Christin Chiu in a stock exchange filing.

Tellingly, she added that Esprit generates “negligible revenue and incurs losses from its operations in the Greater China markets”.

Last year the brand opened a pop-up store in Causeway Bay which drew varied assessments. The brand has not updated its Hong Kong Facebook page since March 2023, suggesting it is focusing on other markets anyway.

Funds raised from the sale would be used as general working capital for Esprit, which has racked up billions of dollars of losses over the past decade under multiple owners and management. In March it reported a $300 million loss, citing a poor macroeconomic environment in Europe, particularly in Germany, an inability to reduce operating expenses, and the short-term effects of its restructuring efforts. The company has turned a profit just once in the past nine years, in 2021. 

Last month, the company placed its seven German subsidiaries in bankruptcy for a second time, after filing for bankruptcy in Belgium and Switzerland in March.

Under its currently controlling ownership – entities owned by members of the Vitasoy founding family – the company has relocated some of its operations to California and established a global creative and design hub in New York.

In its latest filing, Esprit stressed that – despite the level of detail disclosed – no legally binding agreement has been reached on the potential disposal. 

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