MW Esprit in talks with private-equity firm for potential investments
By P.R. Venkat
Esprit (HK:330) is in talks with an international private equity firm regarding prospective investments as the fashion retailer struggles with its European business, which saw some of its units declaring insolvency.
The potential investor has expressed interest in submitting a non-legally binding framework memorandum of understanding for a possible partnership, Esprit said on Wednesday.
The potential investor intends to assist the company in the restructuring and turnaround of tis European business, which it will have control of, Esprit said without identifying the private equity firm.
The retailer's European business has been stressed due to high energy and logistics costs and weak consumer sentiment. Its units in Belgium and Switzerland have already filed for insolvency, citing cash flow difficulties.
The Hong Kong-listed group has experienced losses in recent years. According to their 2023 results, Esprit's losses widened to 2.24 billion Hong Kong dollars (US$286.0 million) from HK$642 million in 2022. This year the company expects global economic growth to slow down further and weaken consumer spending beyond essential needs.
Esprit said the potential investor was also interested in investing in North American and Asian markets.
"The potential cooperation is subject to the signing of the definitive transaction agreement. Therefore, the potential cooperation may or may not proceed," Esprit said
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(END) Dow Jones Newswires
April 09, 2024 19:44 ET (23:44 GMT)
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