Esprit's bottom line sags despite restructuring
Fashion chain's chief executive says more time needed to see benefits of overhaul but some positive signs detected in womenswear
The big turnaround for Esprit is unlikely to come any time soon, but the new chief executive of the embattled fashion group - which lost HK$465 million in the six months to December - said he saw positive signs emerging.
Jose Manuel Martinez Gutierrez, who replaced his predecessor in September, said yesterday he was fine-tuning a HK$18 billion restructuring plan introduced two years ago.
While it would take time for the plan's benefits to translate into operational results, he said, there was a gradual softening of the declining trend in wholesale orders, especially this month.
"The outlook for the second half of our financial year is full of uncertainty. We started in a very challenging position, and the traffic of our shops was declining in general … But we started to see some positive signs in the women's collection," Gutierrez said.
Slow sales and divestment of Esprit's North American business reduced interim turnover by 13.4 per cent to HK$13.55 billion, while operating expenses remained high at HK$7.18 billion, as wholesalers returned nearly HK$4 billion worth of aged inventory.