Struggling Esprit to close more than 40 shops in Europe
Retailer is hammered by net loss of US$121.9 million for second-half of last year, compared with a net profit of US$7.79 million for the same period in 2016
Once the darling of both the fashion world and the capital markets, Hong Kong-listed fashion house Esprit Holdings found itself struggling in the second half of last year, as it continues to be hit by a weaker-than-expected performance by its bricks-and-mortar stores in countries including China.
The company reported a net loss of HK$954 million (US$121.9 million) for six months ending December 31, its own first-half recording period, compared with a net profit of HK$61 million (US$7.79 million) for the same time in 2016, while revenue was hit with a 3.4 per cent drop year on year to HK$8.03 billion, compared with HK$8.32 billion.
The decline in its China business in recent years, as well as larger-than-expected drops in second quarter revenue ending December 31 were blamed as the major causes of the net loss.
The Hong Kong-based retailer founded in 1968 in the US generates around four-fifths of its revenue from European countries including Germany.
But in the past five years it has turned its focus to the China apparel market, which is valued at around US$300 billion.
We will try to save as many [jobs] as we can. Sometimes we will transfer employees working at the closed shops to other stores, or open smaller stores beside the closed ones
The company hit its prime after 2007, when it recorded its 15th consecutive year of double-digit growth, but has since been facing rising competition from e-tailers and a more sophisticated clientele in China, who have changed their focus from price to design.