-- Esprit taps Jose Manuel Martinez Gutierrez as chief
executive
-- Mr. Martinez was previously group director of distribution
and operations for Spain's Inditex SA.
-- Esprit's share price jumps after announcement
(Adds share price reaction and comment from analyst.)
By Chester Yung
HONG KONG--Esprit Holdings Ltd.'s (0330.HK) shares jumped more
than 30% Tuesday afternoon as investors welcomed the fashion
retailer's announcement that it tapped a senior executive from Zara
parent Inditex SA as its new chief executive, resolving a major
source of uncertainty that had been weighing on the blue-chip
company.
At 0610 GMT, Esprit's Hong Kong-listed shares were up 28.6% at
HK$12.82, down slightly from their earlier high of HK$13.80.
Analysts said the appointment of Jose Manuel Martinez Gutierrez as
chief executive removes a major overhang on the stock in the wake
of the unexpected resignations of the company's chairman and chief
executive in June.
Esprit's shares fell below HK$10.0 after the resignations, from
above HK$13.00 before they were announced.
The fashion retailer said Mr. Martinez, 42, was previously the
group director of distribution and operations for Inditex, the
world's largest fashion retailer by sales and owner of the
fast-fashion chain Zara. The appointment will take effect in or
before September.
CLSA analyst Mariana Kou said the appointment is a positive
development for Esprit given Mr. Martinez's strong retail
background, but the question now is whether he will be able to help
the company transform itself given the many challenges it is
facing.
The European debt crisis has hit the company hard, and it has
struggled to fend off stiff competition from Inditex and Sweden's
Hennes & Mauritz AB, which sells its products under the H&M
brand.
Last September, after reporting a 98% decline in profit for the
fiscal year through June, Esprit declared it had "lost its soul"
and announced plans to exit its North America business, close
retail operations in three European countries and invest more than
US$2.32 billion over the next four years to rebuild its brand.
In February, the company reported weak-yet-improved results, a
74% drop in first-half profit, and said its four-year
"transformation journey" was well under way.
Write to Chester Yung at chester.yung@dowjones.com
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