Esprit says it will exit the Indian retail market by the year’s end after seven years trying in vain to turn a profit there.

The Hong Kong-based apparel brand will not renew its distribution deal with Indian company Madura Fashion, a part of Aditya Birla Group, citing continuous losses. The company is reportedly losing around Rs20-25 crore (around US$3.5 million – US$4.5 million) annually, according to The Economic Times newspaper.

Its losses resulted in the closure of flagship stores in Mumbai, Bangalore and Delhi last year which were replaced by Madura’s other brands Van Heusen, Louis Philippe and Allen Solly.

Esprit planned to boost its presence in India through stores-in-stores and through expansion into second-tier cities. However, the plans did not materialise as it failed to keep up with competition from the likes of Zara, Vero Moda and Forever 21.

Esprit’s Indian stores are discounting prices by up to 60 per cent to clear inventory.

The retailer, which said earlier this year that it had ‘lost its soul’ after its earnings fell 98 per cent last year, has already exited the North America market.

GB