Esprit said it is looking to exit loss-making operations and will embark on a new business model which includes optimising the company’s structure, as well as setting up a more flexible and scalable European distribution centre. Credit: Shutterstock.

Esprit provided the update on its Europe businesses as several subsidiaries opened insolvency proceedings.

Esprit said it is looking to exit loss-making operations in Europe and will embark on a new business model which includes optimising the company’s structure, as well as setting up a more flexible and scalable European distribution centre, potentially in the Netherlands.

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It had previously been reported to be looking for potential investors to rescue the European arm of its business.

This news came as Esprit warned of a HK$1.9bn net loss for 2023 due to a tough European market.

While its German subsidiary remains in discussions over a potential acquisition, it is likely the Swiss and Belgian subsidiaries will be closed, Esprit revealed.

Esprit added it is actively seeking financing through various channels with a view to improving the financial position of the group and enlarging the capital base of the company.

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While certain investors have expressed their interest in the company with a view to grow its European business, Esprit said any funds raised will be mainly used to pay suppliers to secure a sustainable supply chain and avoid disruption in the wholesale business; and rebuild the group’s new operational infrastructure system.