Esprit, the Hong Kong-listed global fashion label, has reported a loss attributable to shareholders of US $ 91 million in the first half of the financial year.
Revenue decreased by 17 per cent to US $ 385.6 million from US $ 462 million US in the prior year, even though the cost of acquisitions also decreased by US $ 37.5 million. The majority of the sales fall took place in Europe, where Esprit claimed that the conflict in Ukraine had harmed customer confidence.
Chairperson Christin Chiu noted “adverse trading conditions” in the first half of the year in a report to shareholders, but added that “a series of progressive initiatives to reinvigorate growth over the past half year” should pay off in the second half, with June sales figures showing “noticeable positive developments.”
She claimed that the business was continuing to optimise its operations, including shutting down unprofitable outlets and, when feasible, renegotiating leases. Low gross profit margin product lines have gradually been phased out in favour of collections and capsules with “substantially higher margins”.
According to Chiu, moving the business’ global marketing and branding headquarters to New York has boosted the brand’s reputation and brought in more customers, particularly from younger age groups.
Esprit has established a worldwide headquarters for IT and IT innovation in Amsterdam as part of its efforts to create an “attractive and user-friendly e-commerce experience” and include an omnichannel structure.
There is also an ongoing focus on expanding into North America, a market Esprit sees as key and that will “significantly contribute to the group’s revenue and profit in the near future”.
“The financial results of the company are unsatisfactory as a result of the detrimental factors identified earlier. However, management has begun instigating bold corrective actions,” said Chiu.
