For many people born in the 1970s and 1980s, owning a piece of ESPRIT fashion was once a beautiful memory of their youth. For more than 20 years, ESPRIT can be called their fashion enlightenment.
As the year comes to 2020, ESPRIT has to wave goodbye to everyone and has announced that it will be held in May 2020. The store will be fully closed on March 31st. Its parent company Esprit Global (00330.HK) continues to shrink its front lines, withdrawing from China and Asia, leaving only the European market with no way out.
In December 2019, Esprit Global announced the establishment of a 100 million yuan joint venture with Mulsanne Group (01817.HK) The new company, in which Mulsanne Group holds 60% equity. The joint venture will fully take over the ESPRIT brand business.
According to Esprit Global’s announcement, the transition of China’s business to a joint venture business model is expected to be completed on June 30, 2020. As part of the transition, Esprit Global will close a number of stores or will The assets of the remaining Chinese stores are transferred to the joint venture.
Ningbo Mushang Group was founded in 2007. It is a fashionable men’s clothing company with core brands such as GXG. If it takes over ESPRIT, it will add women’s clothing categories.
Unfortunately, the COVID-19 epidemic has brought another unexpected disaster. According to a recent announcement by Esprit Global, due to the impact of the epidemic, the group will streamline operations and reduce costs, terminate its business in China, and close all retail stores in Asia to focus on its core market in Europe.
As a shareholder of Esprit Global’s new company, how does Mulsanne Group view ESPRIT’s announcement to bid farewell to China? As of press time, Mulsanne Group has not yet responded to this question.
The reporter checked the Esprit global financial report and found that in the three quarters as of March 31, 2020, the revenue of the 56 ESPRIT stores was only HK$267 million, accounting for the total revenue of the group during the same period. Revenue is less than 4%. In the entire fiscal year 2019, Esprit achieved revenue of HK$12.932 billion, a year-on-year decrease of 16.3%, of which revenue from the Asian market only accounted for 9.5% of the group’s total revenue; the net loss during the period was HK$2.144 billion, a year-on-year increase of 16.1%.
The revenue from the Asian market is too small and has become useless for the company. Esprit finally lost patience.
ESPRIT official mall shows that member registration has been stopped on February 28, 2020. Members will no longer receive new consumption points for their purchases, and related rights and interests such as member birthdays and discounts will also be lost. termination. Members’ remaining points and gift certificates should be used before May 31, 2020. After that, all points and gift certificates will be cleared.
The reporter noticed that ESPRIT’s official mall has shown “no products”, and although the Tmall flagship store still has promotional pictures, it is no longer available for purchase. Its announcement shows that Tmall ESPRIT official flagship store will say goodbye to everyone for a period of time starting from May 31, so stay tuned for the upgraded new image. This also means that ESPRIT may still be sold online in the future.
Now, ESPRIT will focus on the European market after bidding farewell to the Asian market. As of March 31, 2020, ESPRIT still had 2,895 stores in Germany (including wholesale distribution channels) and 1,681 in other parts of Europe.
Although selected ESPRIT stores in Germany, Sweden and the Netherlands have reopened, the subsequent impact of the epidemic is still far-reaching. Esprit said it cannot predict when business will return to normal, nor can it quantify the impact of the epidemic on full-year performance.
The Esprit Global announcement also revealed that the executive chairman of the company’s board of directors and the group CEO will no longer receive salary during the restructuring period, and the company’s management has also reduced their salaries by 20%-35% respectively.
How are the clothing brand giants doing before the global economy restarts?
The global epidemic continues to spread. As of now, the cumulative number of confirmed cases of new coronary pneumonia worldwide has exceeded 4.17 million, and the cumulative number of deaths has exceeded 283,000. Although many countries have considered “unblocking” matters, the global economic restart has not yet entered a normal pace due to the rising number of confirmed cases of the epidemic. Under this situation, are the giants in the clothing industry okay?
1. H&M
Recently, Swedish fast fashion brand H&M released The first quarter financial report showed that as of the end of the reporting period, 3,778 stores in 54 markets had been closed, resulting in a sharp decline in operating income in the first quarter. It is understood that since Italy announced a nationwide lockdown on March 10, H&M has temporarily closed all offline stores in 13 European countries or regions including Italy, Poland, Spain, Bulgaria, Belgium, France, Austria, and Luxembourg. Among them, 8 stores in Italy will be closed. The company stated that this move is to optimize the store portfolio. Due to the impact of the epidemic, sales have declined and growth has slowed down. Only stores with poor operating performance will be closed, which will be harmful to the group. It’s a solution.
Currently, about 60% (3,050) of H&M’s 5,061 stores are still closed; Of the 51 e-commerce marketplaces, 46 are still open.
In local currency between March 1 and May 6��Uniqlo, one of Asia’s fast fashion giants, is not immune.
Last Thursday, Japanese fast fashion giant Uniqlo announced key monthly financial data for the Japanese local market. The financial report shows that Uniqlo’s sales in Japan continued to decline sharply in April. Same-store comparable sales including online sales fell by 56.5% year-on-year, and total sales including online sales fell by 57.7% year-on-year.
Uniqlo’s performance is often greatly affected by weather, especially sales of its functional basic apparel. But this time it was mainly affected by the new coronavirus epidemic, which caused most of its stores to temporarily close or reduce operating hours. Store traffic has been greatly reduced, and consumers are cautious about going out for shopping. Uniqlo said many consumers decided to “stay at home to fight the epidemic.”
In April, at least 299 Uniqlo stores were open as usual, but the business hours were shortened and 311 stores were temporarily closed. Same-store traffic, including online sales, fell 60.6%.
In order to better break the situation, UNIQLO started data mining on people’s consumption attitudes and changes in consumption behavior before and after the epidemic. Focusing on the brand concept of “LifeWear clothing for life”, UNIQLO starts from the four aspects of peace of mind, health, high quality and sustainability, and gradually builds a full link from establishing brand immunity and health in the early stage to opening up life and vitality today. . Currently, they are “evolving” in all aspects through product innovation, online and offline services and innovation, brand value building and social responsibility fulfillment.
At the same time, UNIQLO launched new 2020 spring and summer new products, including five major series: lifestyle sports, healthy sun protection, AIRism comfortable underwear, UT world cultural and creative pioneer, and high-quality classics. Under the pressure of the epidemic, people have new demands for clothing that is more comfortable and healthy, efficient in multiple scenes, and can also generate emotional resonance and serve as a cultural carrier.
Fast fashion giants once enjoyed great success in the global apparel industry due to their “extremely fast” logistics chain integration and their representation of fashion trends. But now, due to the raging epidemic, it has fallen into a “shuffle” crisis. Various brands are constantly making corporate adjustments and brand management in the new post-epidemic era, but they still cannot withstand the impact of the epidemic on revenue decline and consumer loss. Will they still usher in their own “fast” pace? ? </p
