Esprit Holdings, the Hong Kong listed clothing retailer, may be rethinking its businesses in North America and Asia, analysts said yesterday. The company is considering the possible sale of its operations in the US and Canada, according to Bloomberg, which cited three people familiar with the matter. Patrick Lau, Esprit's senior vice-president for finance and head of investor relations, declined to comment. Analysts said it would be sensible for Esprit to exit the US market to focus on expansion in fast-growing Asia, especially as the sagging European market accounts for nearly 80 per cent of Esprit's revenue. According to Esprit's interim results for the last six months of 2010, revenue in Europe fell 3.3 per cent, or HK$1.7 billion, due to declining sales and weaker European currencies. The biggest revenue declines were in Portugal, Italy and Britain. North America, which has more than 90 stores, was considered a growth market, where revenue rose 10.8 per cent to HK$657 million, but it only accounted for 3.7 per cent of the group's total revenue of HK$17.69 billion. In contrast, revenue in Asia surged 38.8 per cent to HK$3.02 billion, accounting for 17.1 per cent of total revenue. Castor Pang, research director at Core Pacific-Yamaichi, said the inability of Esprit to disentangle itself from European markets' malaise would continue to hurt its share price. Esprit shares have fallen significantly from their peak of HK$64.50 per share in March 2010 - when worries about European debts first surfaced - and closed at HK$20.50 per share yesterday. More than two-thirds of its market value has been wiped out. While Esprit may attempt to exploit Asia's rapid economic growth, especially on the mainland, Kenny Tang, general manager of ATMD Financial Planning, said it was unlikely to be able to compete with other mid-tier clothing retailers. Meanwhile, shares of luxury fashion label Prada yesterday fell 8.2 per cent to close at HK$38.25 per share, Prada's lowest since its debut in June. Pang said Prada, unlike Esprit, was not as affected by the weak economies in the US and Europe because Asia generates most of its revenue. He attributed the decline of Prada shares to price correction - the stock was still trading at a high price-to-earnings ratio, which stood at 38.4 yesterday despite the stock's fall. 'When the market is robust, investors are willing to pay a premium,' Pang said. 'However, the current market is weak. So it is calling for a correction on stocks which are trading at extremely high PE ratios.' Pang expects Prada shares to fall further until its PE ratio drops to 30 times.