Esprit (330) is showing signs of a rebound. After falling 73 per cent last year, the stock has risen 41 per cent so far this year.
The turnaround is largely thanks to an HK$18.5 billion restructuring of Esprit's business - involving a revitalisation of its stores, marketing and designs - that was mapped out in September. The firm has since made a number of changes: chief financial officer Chew Fook-aun resigned in December and, in January, Esprit announced the hiring of the well-regarded Melody Harris-Jensbach from Puma sportswear as its chief product and design officer.
In November, it announced that Holly Li, formerly of Adidas, would take over as the chief executive of China operations.
Most recently the firm has revealed it will be shutting its unprofitable North American stores to better focus on its ambition to double its sales in China over the next four years, to HK$6 billion. The firm is also establishing a design hub in China to cater to Chinese tastes.
Esprit is also a high beta stock that has benefited from an overall rebound in the Hang Seng Index. Furthermore, as more than 80 per cent of its sales are in the euro zone, it has likewise been helped by recent progress seen in resolving the region's sovereign debt crisis.
Tanuj Shori (Nomura) has been neutral on the stock since initiating coverage five months ago. He says the firm has put in place a very efficient management team but believes it will take two to three quarters to see evidence that its restructuring is working.