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The resignation of a second top manager in as many days at Esprit Holdings is likely to send the Hong Kong fashion retailer's share price lower today as investors weigh the implications for the company's turnaround strategy. 
 Hans-Joachim Koerber resigned last night from his post as chairman with immediate effect, just one day after chief executive Ronald van der Vis (pictured) said he would leave on or before July 1 next year. 
Chief financial officer and executive director Chew Fook Aun quit in early December.
Yesterday, the price of Esprit shares on the Hong Kong stock exchange dived 21.8 per cent to HK$10.54 each, the biggest intra-day fall in 15 years, on news of van der Vis' plans to leave. The company asked for trading in its shares to be halted in the afternoon. 
Raymond Or Ching-fai, former head of Hang Seng Bank and a senior manager at HSBC, was appointed chairman of Esprit to replace Koerber. Or is an independent non-executive director of the company. 
Meanwhile, Paul Cheng Ming-fun, former chairman of real-estate-investment-trust Link Management, was appointed deputy chairman. Cheng also serves as an independent non-executive director of Esprit. 
The latest developments mean that Esprit's board will be led by two executives who do not have fashion retailing experience and an out-going chief executive, van der Vis. 
Other board members include chief financial officer Thomas Tang Wing-yung, non-executive director Jurgen Alfred Rudolf Friedrich and independent non-executive director Alexander Reid Hamilton. 
The management shuffles have cast doubt on the company's ability to effectively pursue a plan to turn its fortunes around by refurbishing stores, closing loss-making outlets in North America and improving designs to compete with European rivals Zara and H&M. 
'It's negative news as van der Vis is one of the management who formulated the transformation plan,' DBS Vickers Hong Kong analyst Alice Hui said. Van der Vis' departure would not necessarily change the direction of the plan, she added, but could slow down its execution. 
 The resignation of the top management underscored the difficulty in re-establishing Esprit's brand, Goldman Sachs wrote in a report yesterday. 
 Bank of America Merrill Lynch yesterday lowered the target share price of Esprit to HK$12.50 from HK$14 partly because of the uncertainty over the timing of the company's overhaul strategy. 
 In an effort to revitalise the Esprit brand, which van der Vis once said had lost its soul, the company appointed Puma executive Melody Harris-Jensbach to the new role of chief product and design officer in January. 
Last year, it hired super model Gisele Bundchen to present the brand's new direction as it launched a fresh retail store concept. 
 The company reported a 74 per cent slide in net profit to HK$555 million for the six months to December on a 5.6 per cent decline in sales. 
 Goldman Sachs also said yesterday that it was disappointed with the slow pace of the recovery in Esprit's income growth and forecast that the company's profit margin would not substantially rebound until 2014. 
In a Hong Kong stock exchange filing last night, Esprit's board thanked Koerber for his contribution to the company, while Koerber confirmed that he had no disagreements with the board. 
Van der Vis said on Tuesday night that he decided to resign for personal and family reasons and also had no disagreement with the board. 
The board said it regretted van der Vis' decision and that there was no matter that needed to be brought to the attention of the company shareholders regarding the resignation.



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Retailing

Esprit goes into tailspin as chief executive exits