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Eric Ng

Embattled global casual wear retailer Esprit warned investors it might record a loss for the six months to December 31, owing mainly to worse-than-expected results since October.
The company, which has lost market share in recent years to rivals such as Gap of the United States and Zara of Spain, has yet to deliver any sign of a turnaround, despite having announced 20 months ago an HK$18 billion overhaul of its operations to boost profitability.

Sales in the three months to September 30 fell 22.8 per cent year on year to HK$6.6 billion, Esprit said in October. Net profit grew to HK$873 million in the year to June 30 from HK$79 million in the previous financial year, but sales tumbled 10.7 per cent to HK$30.2 billion.
Esprit did not give figures for its performance since October or specify why it was worse than expected. It plans to announce its interim results in February.
The firm has missed analysts' earnings estimates five years in a row, according to Bloomberg.
Esprit said: "The company will continue to focus its efforts to rebuild and revitalise the brand … improve the quality of its products … provide better efficiencies on its supply chain and distribution channels."
It announced in late October a rights issue to raise HK$5.2 billion by selling shares at a 36 per cent discount, to fund the overhaul, which entails product quality and design improvements, refurbishment of shops and streamlining of operations.
Some analysts worried the rights issue was a sign Esprit was facing deteriorating cash flows and a lengthening of customer payment periods amid a recession in Europe, which accounts for 80 per cent of its turnover.
Esprit had cited slowing economic growth on the mainland for a 3.3 per cent year-on-year slide in its sales there in the year to June 30, although retail sales on the mainland have been growing at double-digit percentages this year.
However, that rate of growth may slow to 10.5 per cent next year from 10.9 per cent this year, predicted Carrie Yu, Asia-Pacific retail and consumer leader at accountancy and consultancy PricewaterhouseCoopers.
Additional reporting by Toh Han Shih


Esprit prepares investors for second-half loss

Esprit has missed estimates five years in a row. Photo: Reuters

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Casual wear brand shows no sign of turnaround despite an HK$18b overhaul of its operations


Esprit prepares investors for second-half loss

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Casual wear brand shows no sign of turnaround despite an HK$18b overhaul of its operations

Casual wear brand shows no sign of turnaround despite an HK$18b overhaul of its operations