Esprit warns of US$125m loss as China business takes a hit
Once the darling of retail analysts, the stock has lost 97pc since prices peaked in 2007
The company said it expected to report a net loss of between HK$950 million and HK$980 million for the six months ended December 31, 2017, compared with a net profit of HK$61 million for the same period last year in a filing to the local bourse on Wednesday.
It cited a full impairment due to the decline in its China business in recent years, larger than expected revenue drop in the second quarter ended December 31, and taxation expense of about HK$5 million as reasons for the expected net loss.
Despite the declines, the company said it was undaunted.
“Esprit is totally committed to make our China business successful and to grow our business in the country,” said Thomas Tang, executive director and chief financial officer of the company in an email reply.
“We have created a dedicated team to strengthen our business in China, and this includes a new product line, a new store concept, a more attractive wholesale model, and a separate local supply chain to serve the market,” he said.
Tang said the actual operational loss before interest and tax was likely to range between HK$150 million to HK$180 million, below the company’s expectations.