Shares of Esprit Holdings Ltd fell by nearly a quarter on Wednesday after the clothing retailer's chief executive resigned, casting uncertainty over its costly restructuring plan and efforts to revitalize a brand that it admitted last year had "lost its soul".
The company said late on Tuesday its group chief executive, Ronald van der Vis, had resigned for personal and family reasons, marking a second senior management change in two months.
"The resignation of the CEO, combined with the departure of the former CFO Chew Fook Aun, is not seen as an isolated incident. It may suggest that the transformation, in particular revitalizing the brand, is tougher than expected," said Alex Wong, a director at Ample Finance Group, as reported by Reuters. Chew quit for personal reasons in December and was replaced in April by Thomas Tang, a former chief financial officer of blue-chip property developer Sino Land Co Ltd.
Esprit did not announce a replacement for van der Vis, who would have played a key role in the company's HK$18 billion ($2.3 billion) restructuring plan due to be completed by 2015.
"As they both resigned almost at the same time, the impact will be huge. Investors are likely to lose confidence in the company," said Linus Yip, chief strategist at First Shanghai Securities, adding further pressure is expected on the stock of a company which last year admitted it had "lost its soul".
Fox News reported how on Wednesday evening the company’s announcement on how Hans Joachim Korber had resigned as chairman and would be replaced by Raymond Or Ching Fai, a move that added further confusion to the outlook for Esprit. "With the weakness in the stock price and the CEO's resignation, it escalates the possibility that the company could become a merger and acquisition target," said Tommy Ho, analyst at UOB Kay Hian, to the American TV channel.
Meanwhile, Talbots Inc. said Wednesday that private equity firm Sycamore Partners will extend the commencement of its tender offer by two days, to acquire Talbots common stock. The tender offer will begin on June 15. Sycamore, which is Talbots' largest shareholder, in May agreed to acquire the struggling retailer for $2.75 per share in cash. The transaction is valued at about $369 million, including Talbots' net debt. In the past year, the stock has traded in a range $1.28 - $10.40, remarked RTT News.
Last but not least, Spain's Inditex SA topped national benchmark index after posting net profit for its first quarter ended April 30 up to 432 million euros ($540 million), up from EUR332 million a year earlier. Analysts had expected net profit to come in at EUR379 million, according to FactSet. Analysts at broker Chevreux said, "Our feeling is that Inditex has managed to offset weak sales in southern Europe with online and Asian sales growth."