- Prachi Singh |
Esprit has announced that it has received a green light from the Düsseldorf District Court for the restructuring process. The company said in a statement that the key elements of the restructuring plan include headcount reductions of approximately 1,200 employees or 20 percent of the workforce, in the range of 800 store employees in Germany, 300 non-store employees in Germany and 100 employees from the Hong Kong office, further salary and benefit reductions for non-store personnel and closing of approximately 50 stores in Germany mostly by the end of November. This is in addition to the 56 Asian stores announced for closure in April, since shut down.
Commenting on the restructuring plan, Esprit Group CEO Anders Kristiansen said: “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.”
The company added that the implementation of the above mentioned measures will lead to annual savings in excess of 100 million euros, and will create exceptional one-off costs of around 55 million euros. The Esprit management team will use the next three months to consequently execute the restructuring measures and accelerate implementation of the strategy initiated by management at the end of 2018.