The major shareholder of embattled fashion label Esprit appears to have pulled off a management coup, with the German senior executives leading the turnaround plan since June 2018 announcing their exit and the company saying head office functions will return to Hong Kong.
North Point Talent Ltd, the investment vehicle of Karen Lo, a descendant of the Vitasoy founding family, became Esprit’s largest shareholder in July, securing a 13-per-cent stake. At the time, North Point sought an urgent extraordinary shareholder meeting to vote on the exit of Kristiansen and another director, Dr Johannes Georg Schmidt-Schultes.
Within a few weeks, and in an apparent compromise, the board appointed North Point nominees Marc Andreas Tschirner, Christin Chiu Su Yi and Wong Hung Wai as additional executive directors of the company and subsequently declared it had “strong confidence in the Group CEO and Group CFO as well as their management team”.
However yesterday the Hong Kong-listed company issued a stock exchange announcement saying that Kristiansen and Schmidt-Schultes had resigned their positions as executive directors with immediate effect. The former will continue as Group CEO, and the latter as CFO until February 28 “or such earlier date as requested by the group”.
A motion filed on November 19 in advance of the company’s annual meeting scheduled for today calling for a poll on the board’s composition, but yesterday’s resignations mean no poll will now be necessary.
The two executives successfully steered the company through Protective Shield Proceedings in Germany during the past eight months and oversaw massive restructuring which resulted in store closures and staff culls throughout the business.
The more surprising news however was the company’s planned return to Hong Kong, given it had closed all of its stores in Asia – except in Mainland China – before June 30 this year.
“It is the intention of the group to concentrate the global administrative functions … based in Hong Kong and the company will identify potential candidates to fill the above positions to be vacated by Mr Kristiansen and Dr Schmidt-Schultes,” the statement read.
The departing executives confirmed they have no disagreement with the board and there are no matters in relation to their resignations that need to be brought to the attention of the shareholders of the company.
“Mr Kristiansen took over as Group CEO in June 2018 and has actively repositioned the group in extremely difficult times to adapt to the challenging global retail environment. He has been instrumental in leading the group for the global realignment,” the company said.
“The board would like to take this opportunity to express its sincere gratitude to Mr Kristiansen and Dr Schmidt-Schultes for their valuable contribution to the company during their tenure of office,” read the statement, signed by company secretary Ophelia Lo.
In September, Esprit reported a 21-per-cent decline in sales for the year to June 30 to US$1.277 billion and after a variety of write downs, reported a loss attributable to shareholders of $503.2 million.