Esprit announces voluntary redundancy plan

By

Bruno Joly

Translated by
Nicola Mira

Published
May 25, 2016

Esprit is taking action to reduce its costs, especially in Germany. In March, at an investors day, the retail brand announced its desire to cut operational costs by €100 million in the next two years, without necessarily reconsidering its investments in marketing and omni-channel growth.

In plain language, Esprit will be cutting jobs, starting from Germany, the company's leading market, where it generates 47.5% of its business. Esprit is planning to cut its German wage bill by 10%. A voluntary redundancy desk will open in June, but all countries will have to be involved in the effort. The French subsidiary had already set up a redundancy plan in 2012.

In the first six months of the fiscal year that started on 1st July, Esprit's sales fell by 13% to approximately HKD9.3 billion (€1 billion). They were instead stable at constant exchange rates. However, EBIT plunged in the red, at -247 million. At the same time, personnel expenses have decreased but those for marketing and advertising skyrocketed by more than 46% at constant exchange rates.