(Yicai Global) May 14 -- Fast fashion brand Esprit will shut down all its stores in the Chinese mainland on May 31 for “brand upgrading,” and the company will offer clearance sales before then, according to a recent announcement on its official site and its flagship store on Alibaba Group Holding’s Tmall online emporium.

Esprit, which has dual headquarters in Hong Kong and Ratingen, Germany, previously offered discounts of up to 95 percent. No goods are currently available on its official site or Tmall store.

Esprit’s positioning in the Chinese market has been vague in recent 10 years and the firm has failed in competition with Spanish rival Zara and the Uniqlo brand of Japan’s Fast Retailing. Its exit from China became inevitable after it lost control of its product positioning, channel structure and operational management, even before the impact of Covid-19, 21st Century Business Herald reported today, citing the opinion of an analyst with a securities firm.

Esprit has a fallback, however. It will ally with Ningbo, Zhejiang province-based apparel retailer Mulsanne Group, per the report. Esprit’s Million Success Resources unit will set up a China joint venture with Mulsanne to retail garments and accessories. Esprit will take a 40 percent stake and Mulsanne will hold 60 percent in the JV which will have CNY100 million (USD14.1 million) in registered capital.

Esprit was founded in 1968 in San Francisco, California, by the married couple Douglas and Susie Tompkins. Mulsanne, which formed in 2007, is a leading Chinese retailer of men’s clothing. The group’s affiliated brands include the ready-to-wear men’s brand GXG.

Editor: Ben Armour