The share price of the well known manufacturer of apparel, footwear, accessories, jewelery and house wares under the Esprit brand, headquartered in Kowloon, Hong Kong, Ratingen and Germany, continued to take a beating Wednesday,plunging as much as 23% when Chief Executive Ronald Van Der Vis' resigned surprisingly, raising concerns over the fashion retailer's plans to boost flagging sales.
The quitting of Van der Vis from this large concern suddenly becomes a second high-profile exit from the senior management team in as many months and comes as Esprit struggles to reinvigorate its performance through such initiatives as brand rebuilding and cost-cutting. Chew Fook Aun stepped down as Group Executive Director and Chief Financial Officer on May 1, and his last day of employment in this large textile concern was June 1.
At 0310 GMT, shares of Esprit were trading 21% lower at HK$10.64, slightly above a low of HK$10.36.
The company said on Tuesday, that Van Der Vis has resigned from his office citing "personal and family reasons.” His resignation effective on or before July 1, 2013, according to the contract signed by him. The company didn't say who would replace Van Der Vis.
Merrill Lynch, the Wealth Management Division of the Bank Of America stated in a report that it expects the market to react negatively to the news of Van Der Vis’ resignation from Espirit Holding Limited as he is the key person driving the group's four-year transformation plan, starting from September 2011, and has rebuilt the management team over the past 18 months.
Macquarie, a leading service provider of banking, financial advisory and investment said the resignation of Van Der Vis comes as a surprise, but doesn't change its fundamental thesis on the retailer.
"We also believe that Esprit has deep management strength to continue executing on the transformation plan - although more senior departures would cause our conviction to waver," the house said in a report by Macquarie.