The former chairman of clothing retailer Esprit on Thursday doubled his stake in the company, driving its shares more than 20 percent higher amid speculation he plans to help revitalise the group.
The stock closed at HK$12.9 on the Hong Kong stock exchange after Michael Ying raised his stake to 5.99 percent from 4.76 percent in a $35 million vote of confidence in the ailing brand’s future.
The benchmark Hang Seng index fell 1.55 percent.
“We believe investors’ initial view will be positive, as Esprit had performed strongly under Mr. Ying’s leadership. The market anticipates Mr. Ying taking a more active role in the company,” Deutsche Bank analyst Anne Ling said.
Esprit last month said it would raise up to $677 million in a new share sale to help fund a multi-billion-dollar, four-year restructuring drive.
Founded in San Francisco in 1968 and now headquartered in Hong Kong, Esprit has been bleeding customers to rivals such as H&M and Zara which have made aggressive inroads into the Asian market.
It has announced plans exit underperforming European markets like Spain, Denmark and Sweden to focus on Asia, especially China, after it saw a 98-percent plunge in net profit last year.
The company said if Ying exercises all his options, his stake in the company could increase to 10.33 percent, making him its second-largest shareholder.
Ying started working for Esprit in 1971 when founders Susie and Doug Tompkins chose him as their primary sourcing agent. Ying bought the company in 1989.
Jose Manuel Martinez Gutierrez, a former senior executive at Spanish retailer Zara, was appointed chief executive in August after his predecessor, Ronald van der Vis, resigned unexpectedly in June.
– Dow Jones Newswires contributed to this report –
Esprit up 22% after ex-chairman doubles stake
