Market punishes Esprit after blue chip loses its magic What do you call a magical stock that has lost its magic? Some would call it Esprit Holdings, which reported on Wednesday a disappointing 26 per cent drop in annual earnings, its first profit decline in 10 years. Yesterday, the shares were promptly sold down 15 per cent to HK$50.90, wiping out about HK$12 billion of its market value. It was a dark day for Esprit chairman Heinz Krogner-Kornalik (below) - but not for former Esprit chairman Michael Ying Lee-yuen, who had earlier cashed out most of his shares for HK$20 billion over a two-year period - but he could perhaps consider it a blessing that the bloodbath yesterday was less severe than the 18 per cent post-results drop in the stock last year. That kind of share collapse is not common for a blue-chip company but underlines how investors react when the music stops for a firm that has consistently delivered strong results and beat street estimates. Not too long ago, Esprit was a fund managers' darling for producing high double-digit profit growth, thanks to its well-kept secret, the lucrative European wholesaling business. It is hard to forget that magical day in February 2005 when Esprit shares surged more than 20 per cent to HK$50.58 after it delivered good news to shareholders. Now it is back to where it was four years ago. But unlike four years ago, Esprit hinted it would take time to return to the growth track, particularly in its largest market, Germany, where demand remains soft. Another issue is investor confidence in new chief executive Ronald van der Vis. The handsome Dutch executive made a brief appearance at an analysts' meeting and vowed that he would make an evolution, not a revolution, during his reign. However, he appeared not to have impressed investors. Goldman Sachs said the change in Esprit management could still create significant uncertainty in the business operations over the next year or two. Property PR chiefs move The game of musical chairs is on among blue-chip property firms. We hear that Wharf (Holdings) corporate public relations head Margaret Ng is moving over to Sun Hung Kai Properties in about two weeks, replacing existing public relations head Emily Hui, who joined two years ago. Ms Ng has been with Wharf for eight years. We also hear that HKR International head of corporate affairs Joyce Yu will be joining Sino Land as its public relations head, filling in the spot left by Una Lau. Tune in for more movements. Power off It had a strong name but it did not last the distance. Power magazine, the luxurious lifestyle magazine targeted at businessmen, has decided to call it quits after publishing nine issues since October last year. It could have something to do with timing. Founding editor Tony Spaeth confirmed the closure, recalling 'we started two weeks after the Lehman Brothers bankruptcy'. Power has become the third business publication to close because of the economic downturn. Earlier this year, CFO Magazines and Hong Kong Business also ended publication. Sharing the bounty Venetian Macao has decided on an innovative way to celebrate its second anniversary today. The mega-casino, which attracts a crowd of 50,000 daily, will give out HK$500,000 in unclaimed jackpots to five charity organisations for responsible gaming. In another 'thank you, Macau' gesture, it will donate HK$490,000 for university scholarships and fellowships. Investors dig in their heels If you think asking shareholders for approval to issue more shares is just a rubber-stamp exercise, think again. On Wednesday, 68 per cent of Shui On Land shareholders eligible to vote said no to the latest request from chairman Vincent Lo Hong-sui for a share issue mandate. Despite owning nearly 50 per cent of the company, Mr Lo was not allowed to vote. The developer of the upmarket Shanghai Xintiandi residential project had sought to renew the mandate to issue as much as 20 per cent of its existing shares after successfully raising fresh capital by selling new shares in June that were equivalent to 20 per cent of company's share capital. Obviously, shareholders are feeling diluted enough.