Madura-Esprit: New deal maybe delayed

Aditya Birla Group arm Madura Fashion & Lifestyle’s plans

for a new deal with Esprit Holdings for the Indian market may get delayed due to a management change at the German retailer. Madura’s existing licensing agreement expired in June this year. The delay is said to be on the back of Esprit getting ex-Inditex man Jose Manuel Martínez Gutiérrez as its group CEO. While Madura had shut four of Esprit’s flagship stores last year, it had later said that it is planning an aggressive 10-year business plan with the Hong Kong-listed retailer.

Earlier, it was reported that Madura and Esprit agreed to rework their existing distribution ties giving the former more flexibility to scale up local operations of struggling global brand. Last year, Esprit’s operating profit shrank to just 70 million euros (Rs 479 crores) from close to 400 million euros Rs 2,792 crores) an year earlier, owing to the cost of a 1.7-billion-euro (Rs 11,703 crores) restructuring programme which will weigh on profits again this year and next year. It operates more than 800 directly managed retail stores in more than 40 countries worldwide.

Aditya Birla Nuvo, through Madura Fashion & Lifestyle, controls apparel brands such as Allen Solly, Louis Philippe, Van Heusen and Peter.