Fashion firm Esprit announced it has signed a new joint venture agreement in China, one of the affordable apparel brand’s most crucial markets.
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San Francisco-founded Esprit – headquartered in Ratingen, Germany and Kowloon, Hong Kong – has partnered with Mulsanne Group Holding, a Hong Kong-listed apparel distributor with proven experience in China.
According to a press release issued by the fashion brand, both companies have contributed capital, with MGH holding 60% and Esprit 40% of the joint venture entity. The deal covers Mainland China and excludes Hong Kong, Macau, and Taiwan, it added.
“We are exceptionally happy with the deal. MGH has a proven track record of success in China and an already significant apparel business. With local knowledge and a very clear understanding of the Chinese consumer, MGH is the ideal partner for Esprit’s ambitious plans in this important market,” Anders Kristiansen, CEO of Esprit Group.
It is expected that MGH will take over retail and marketing of the Esprit brand in the country. Over the coming months, Esprit and MGH will work out a detailed plan on the arrangement going forward. The transaction is subject to China Antitrust approval.
Hong Kong-listed Mulsanne is an investment holding company. It works with international brands to operate over 2,000 stores in China.
“Esprit is an iconic brand with a unique heritage and authentic founding values. We are thrilled to have Esprit in our portfolio and are looking forward to building a bright future for the brand in China, ” said Yu Yong, CEO of MGH.
It has been a tough few quarters for the under-pressure Esprit. For period ending 30th September, Esprit revenues were down by 10.8% to HK$2.85 billion.
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Esprit Asia revenues plummeted by almost 44% to $175 million. The company said it had closed 72 stores over the previous year and only operated 167 during the first quarter.