bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

David Evans

Clothing retailer Esprit Holdings reported a 31 per cent increase in net profit to HK$460 million for the year to June 30 as it outlined plans for an aggressive expansion into China.

The Hong Kong-listed company said turnover rose to HK$7.27 billion from HK$5.99 billion the previous year.

Operating profit jumped 40 per cent to HK$871 million.

Michael Ying, chairman and chief executive, said that despite the tough operating environment, Esprit was keeping costs down and margins up.

'Are we happy with these numbers? We are very happy with these numbers,' he said.

Retail sales started the year with strong growth but have since begun to slow as consumers remain cautious over the pace of the economic recovery.

However, the latest figures recorded clothing and footwear sales showing a year-on-year 19 per cent growth in volume for the month of May.

Esprit's deputy chairman and chief executive for Asia-Pacific, Surinder Chhibber, said the company plans to open four mega stores of between 8,000 and 10,000 square feet in the mainland next year, with projected annual sales of HK$1 billion within two years.

The company operates one million sq ft of retail space globally, with 360,000 sq ft in Europe and 600,000 sq ft in Asia.

Esprit said it had dedicated HK$450 million for capital expenditure for the coming year, with 60 per cent earmarked for Europe and 40 per cent for Asia.

'We are looking at [additional] retail space in London and Japan,' Mr Chhibber said.

The company said its strategy was still to spin off Esprit Europe on a European bourse, but it was waiting for more favourable market conditions.

John Poon, executive director and group chief financial officer, said the principle objective of the separate listing was to enhance shareholder value, something that could not be done in the present market environment.

'We currently have no plans for relaunching the spin-off,' he said.

In June, Esprit shelved its 200 million euro (about HK$1.38 billion) spin-off of its European operations at the 11th hour, citing volatile market conditions. Hours before shares in Esprit Europe were due to begin trading on the Frankfurt stock exchange, the Hong Kong-listed parent said it was postponing the issue until conditions in the sector stabilised.

The decision was made even though the 15 million shares on offer - including a greenshoe option of two million shares - were fully taken up.

Esprit, which announced the listing the previous month, had planned to use the proceeds of the sale to expand in Europe, where it operates 97 outlets.

The company had also hoped a separate listing would achieve a higher market value for its European assets, which it complained were undervalued by Hong Kong investors.

Esprit announced a final dividend of 11.2 HK cents per share.

Its shares rose 9.8 per cent yesterday to HK$6.15 ahead of its earnings announcement, which came after the market closed.



Clamp on costs helps retailer through tough environment