Global retail chain Esprit is packing up from India by the end of 2012, blaming it on the losses borne by the company in India. The company started operating in 2005 in India through a distribution deal with Madura Fashion and retail, Aditya Birla Group’s lifestyle retailer. . It was suffering losses of about Rs 20-25 crores per annum, which made it unviable for the brand to remain in India. According to industry sources, while Madura Fashion wanted to renew the seven-year-old agreement, the Esprit global management did not show keenness.
In fact, it is said that Madura was in discussion with the global giant to ink a joint venture, where Esprit merchandise would be locally produced in India to reduce import costs as well as other operating costs. But Esprit’s global management did not approve of the idea. In fact, due to mounting losses, Esprit shut down its flagship stores in Bangalore, Mumbai and Van Heusen or Allen Solly.
Esprit wanted to spread its presence through malls and Tier II towns apart from expanding its portfolio and operate multiple formats at a time when other international fast fashion brands like Zara, Vero Moda, Forever 21 have made an entry in the Indian market. Both the parties were planning to rejig operations and announce an ambitious 10-year business plan which included venturing into Tier-II towns. But ultimately that did not work out. Esprit is now in hurry to clear inventory and offering 60 per cent discounts on its merchandise before November 30, 2012.