The Covid-19 outbreak is truly something “special”, in the broad sense that it’s not just a threat to humanity on a life-threatening level…
But also an infectious hindrance to sprawling businesses, in a revenue-wiping kind of manner.
And really, one doesn’t have to look further than the recent collapse of Esprit Asia to gauge just how economically lethal the Covid-19 can prove to be…
Though if sources were to be believed, Covid-19 might simply have served as the final blow for the already struggling corporation.
Esprit Shutting Down All Stores in S’pore Permanently by 30 June Partially Due to COVID-19
To all the die-hard Esprit fans out there, I’ve some bad news for you:
By the end of June, apparel group Esprit will be shutting down all its stores in Asia, save for those in Mainland China.
And no, stores in Singapore are not exempt from this terrible fate.
All 56 company-run stores situated in Singapore, Malaysia, Taiwan, Hong Kong and Macau will be closing down.
According to Inside Retail Asia, the decision comes after a nosedive in sales during the last nine months.
The March quarter, when the Covid-19 outbreak hit, served as a finishing blow of sorts for the already crippled group.
According to sources, retail sales in Asia fell 44.2 per cent, by 48.7 per cent at store level, 45.3 per cent wholesale and 8.1 per cent online in the nine months to March.
In the March quarter, Esprit sales in Asia fell by 52.2 per cent: 61.3 per cent in-store and 54.9 per cent at wholesale level. Interestingly, however, online sales rose by 13.9 per cent.
But unfortunately, that’s not enough to bring the company out of the red.
Gauging by the company’s estimations, the closure of its (designated) Asian stores will probably warrant one-off costs of between HK$150 million and $200 million (~S$27.4 million to $36.5 million).
Esprit has since stated that the Asian store closures are part of a “restructuring initiative to focus resources and recalibrate operations in order to cope with the challenges posed by the pandemic most effectively and efficiently”.
But Wait Folks, Because All Hope’s Not Lost
The retail stores might have closed…
But Esprit’s not gone just yet.
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Apparently the company will continue to run wholesale and licensing businesses in the Asian market, which suggests that the brand might yet endure this period.
However, it’s likely to be present through the likes of department stores and multi-brand stores instead.
But hey, at least you’ll still be able to fulfil your avid Esprit cravings. If department stores can survive the COVID-19 outbreak, that is.
On another note, Esprit’s just one of many retail companies to be hit hard by the Covid-19 pandemic. And with the end of the outbreak still nowhere in sight…
One can only cross their fingers for humans and economic businesses alike.