Esprit takes control-Texglobe

Esprit takes control

Updated: 2009-12-21 Source: www.thestandard.com.hk

Esprit Holdings (0330) will spend HK$3.88 billion to fully take over its textile joint venture from its partner, China Resources Enterprise (0291).

The Hong Kong-based apparel retailer will purchase the 51 percent stake of Esprit China it doesn't already own to "further facilitate Esprit to continue its expansion in [the mainland]," the two firms said in a statement.

Esprit chairman Heinz Jurgen Krogner-Kornalik said the mainland market is high on the firm's list of priorities to strengthen its Asia-Pacific presence.

"We believe Esprit's business in China will become one of the most important growth engines driving the further expansion of Esprit in the medium term," Krogner-Kornalik said.

BOCI Research analyst Ashley Cheung told Bloomberg that Esprit mainly focuses its business on Europe, and it remains to be seen whether it can manage the China venture on its own.

In the three months to September 30, 86 percent of Esprit's sales were in Europe, and 11.2 percent in Asia. Esprit China had net sales of HK$2.6 billion last year.

Its shares closed yesterday at HK$48.45, down 3 percent.