Troubled retailer Esprit is set to close around half of its stores in Germany and cut approximately 1,100 jobs, with both head office and in-store roles set to go. The company said there will be a further 100 job losses in Asia.
The measures are part of a restructuring taking place at the fashion company after receiving court approval to open insolvency proceedings under its own administration.
Esprit filed for self-administration proceedings at the end of March to protect its coronavirus-hit German subsidiaries from creditor claims.
Management said it will use the next three months to execute the restructuring measures and accelerate the company’s turnaround strategy.
This includes efforts to further reduce costs by renegotiating contracts with service providers, consolidating processes, and “carefully examining” all expenses.
These initiatives could deliver annual savings of more than €100 million, Esprit said.
CEO Anders Kristiansen explained: “The impact of Covid-19, subsequent government measures and economic crisis have especially impacted the fashion industry. But this unprecedented situation has required us to challenge ourselves to further evaluate our cost structure and preserve opportunities for our great brand. I am really pleased with the stronger Esprit we are now building.”
In parallel, the management team is working on strengthening the brand’s appeal. Founded in California in 1968, Esprit was very popular in the 80s and 90s, but the rise of new brands and trend-led fashion saw it fall out of favor. To counter the decline, the company is being repositioned as an affordable premium lifestyle brand, creating a consistent customer experience across all touchpoints and elevating product quality with a strong emphasis on sustainability.