Asia Pacific is weak, Esprit loses HK$0.1 billion
Esprit, the parent company of Hong Kong retail casual clothing brand Esprit, is still in the throes of transformation. Esprit Global recently released its financial report for the first half of fiscal year 2016, which showed that the group had a net loss of HK$238 million. In the previous fiscal year, the group had achieved a net profit of HK$47 million.
Despite the loss, the group’s revenue in the first half of the fiscal year ended December 31, 2015 fell 13.1% year-on-year to HK$9.315 billion. The decline narrowed to 0.4% in local currency terms, compared with 13.2% and 9.3% in the past four years. Compared with the declines of 13.4%, 10%, and 10%, this has improved. Group CEO Ma Haosi said that the interim results were in line with market expectations and no profit warning would be issued. Looking at specific businesses, after excluding the impact of exchange rates, the retail business was driven by the development trend of the European market and the growth of women’s clothing. Revenue increased by 6% year-on-year to HK$6.26 billion, accounting for 67.2% of the group’s turnover. Same-store sales increased year-on-year. 8%; the wholesale channel is weak, and revenue fell 11.4% year-on-year. Ma Haosi said that the wholesale business will be difficult to recover in the short term because it involves third-party partners.
In addition, the Asia-Pacific region, led by China, continues to be weak. The financial report shows that after excluding the impact of exchange rates, revenue in mainland China fell 11.6% year-on-year, resulting in a 6% year-on-year decline in revenue in the Asia-Pacific region; revenue in Germany, the group’s largest market, increased 1.5% year-on-year to HK$4.444 billion, and revenue in other European regions was in line with Shanghai Finance. Same period last year. The group attributed the weakness in Asia Pacific to financial market volatility, China’s economic slowdown and the depreciation of the yuan, which weakened consumer confidence and led to reduced tourist flows in the region. Esprit was once the most famous clothing brand in Hong Kong, with annual sales reaching HK$33.8 billion. However, its performance has declined year by year since 2011, and it has been unable to recover. Esprit has proposed transformation plans many times before, but with poor results. Ma Haosi said that the group will complete the store closing plan in the next 1-2 years, and the store portfolio in mainland China will usher in large-scale integration. There are no new store plans in Hong Kong. Esprit loses HK$238 million due to weakness in Asia-Pacific
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