Hong Kong fashion house Esprit says protests to blame for 40 per cent drop in customer traffic
- Company posts better-than-expected results for year ending June 30, sees net loss of HK$2.14 billion
- Rents ‘simply too high’ for retailers, executive chairman says
Hong Kong and Germany-based fashion house Esprit Holdings said on Wednesday that customer traffic at its shops in the city had dropped 40 per cent because of protests over the now-shelved extradition bill that began in June.
“What we are seeing in Hong Kong is abnormal,” Anders Kristiansen, the company’s chief executive, said during an earnings presentation. “You don’t see a reduction in traffic anywhere in the world of 40 per cent. This is massive and, clearly, it is linked to what is happening here.”
Esprit posted better-than-expected results for the year ending June 30. Its net loss stood at HK$2.14 billion (US$273.3 million), 16 per cent less than the last financial year, while revenue stood at HK$12.9 billion, down 12.9 per cent but above estimates by analysts polled by Bloomberg.
The company said its sales were down purely because of the protests, rather than a decline in the number of tourists from mainland China. Paul Chan Mo-po, Hong Kong’s Financial Secretary, said in his blog on Sunday tourist numbers had declined by about 40 per cent in August.
The company has already shut many shops in Hong Kong, including a more than 10,000 sq ft flagship in Tsim Sha Tsui that closed last year, as part of a restructuring plan. Just 9.5 per cent of its revenue comes from Asia.
