Fri, Jun 15, 2012 - Page 10 News List

Esprit upbeat despite shake-up

HEART AND SOUL:The former chairman and the CEO of the clothing retailer resigned without prior warning this week, sending shares plummeting for the second day

AFP, HONG KONG

The new chairman of global clothing company Esprit said yesterday the business was healthy despite the sudden resignation of two of its top executives and a steep slump in its share price.

Raymond Or said he was confident the fashion retailer could overcome its difficulties, as its shares plummeted for a second straight day on investor concerns about management stability.

The company’s shares were 11.95 percent weaker at HK$9.28 on the Hong Kong market yesterday afternoon, following their 21.8 percent plunge on Wednesday.

Chief executive Ronald van der Vis resigned on Tuesday, followed a day later by chairman Hans-Joachim Korber. Both men cited personal reasons for their exit.

Or replaced Korber on Wednesday.

The resignations come in the middle of a campaign to revitalize the brand and restore the company’s balance sheet after its annual profit plunged 98 percent last year.

“The message we got is that Ronald’s departure was because of family [related] reasons,” Or told Dow Jones Newswires.

He said the blue-chip company’s finances were healthy, though its operations in Europe remained under pressure because of the eurozone debt crisis. Esprit’s priority now is to seek a replacement for van der Vis as soon as possible, he said.

“CEO and chairman — that’s the heart and soul of the company, and now they’re both leaving, without letting investors know exactly what’s happening,” Ben Kwong, chief operating officer at brokerage KGI Asia, told Dow Jones.

Or is a former senior executive at HSBC Holdings PLC, and has been an independent non-executive director at Esprit since 1996.

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