In 1968 Susie and Doug Tompkins started selling Esprit clothes out of the back of their station wagon in San Francisco. Today, Esprit Holdings Ltd is a Hong Kong-based company in turmoil with the departure of its CEO and Chairman within days of each other.
"CEO and chairman--that's the heart and soul of the company, and now they're both leaving, without letting investors know exactly what's happening," said Ben Kwong, chief operating officer at brokerage KGI Asia.
The resignations of Esprit's chief executive Ronald van der Vis and chairman Hans-Joachim Korber have triggered a loss of one-third of its market capitalization over the past two days.
"The fact that they resigned close to each other citing personal reasons is a bit too much of a coincidence," said Hong Kong shareholder activist David Webb.
But this isn’t the first of Esprit’s troubles. In September, after reporting a 98% plunge in full-year net profit, the company declared it had "lost its soul" and presented plans to divest itself of its North America business, drop retail operations in three major European countries and would invest more than US$2.32 billion over the next four years to rebuild its brand.
It is a striking public comment—that a company had lost its soul, but a wise one to acknowledge and take steps to correct. But now with the resignation of the CEO, Chairman and two other corporate executives, all citing "personal reasons." The question becomes whether the strategic overhaul—and the reinstituting of the company’s soul will proceed as planned.
Sources: Bloomberg and Fox Business