This article is from the Australian Property Journal archive
THE challenging retail environment has claimed another scalp, with global fashion chain Esprit announcing the closure of 67 loss-making stores across Australia and New Zealand. At the same time, US behemoth Amazon is opening its second fulfilment centre down under.
Esprit said the closure of 67 directly managed stores, 38 concession stands in department stores and 13 outlets will allow management to concentrate in developing other markets in Asia e.g. China, Hong Kong, Taiwan, Singapore and Malaysia with profitable growth opportunities for the future, and avoid incurring further losses from the loss-making operations in Australia and NZ.
For the financial year ended 30 June 2017, the Australian and NZ operations contributed HK$297 million (approx A$50 million), representing less than 2% of the group’s total revenue.
The store closures will affect 350 jobs and the impairment of stores assets from the closures is expected to be in the range of HK$150 million to HK$200 million.
The Esprit closures come as online giant Amazon announced its second Australian fulfilment centre will open in south west Sydney. The 43,000 sqm facility will be located in the Goodman Centenary Distribution Centre in Moorebank.
Esprit joins a string of fashion brands that have failed in Australia, including Topshop, Oroton, Marcs, David Lawrence, Herringbone, Rhodes & Beckett, Payless Shoes and Pumpkin Patch have all collapsed.
Department store Myer announced a $476 million after tax loss for the six months to January and recently hired UK retail executive John King as its new CEO.
Meanwhile Specialty Fashion Group announced late last year that it would close 300 stores across Australia.
According to new research by SV Partners, around 1,500 retailers are at risk of collapse.
Australian Property Journal
