|Esprit reports HK$4.3b annual loss
Fashion retailer Esprit (0330) reported a net loss of HK$4.39 billion in the year ending June. The chain said it was hit by various costs, including those relating to acquisitions in China and store closures. The company made HK$396 million provision to compensate landlords for leases and laid off staff as it shut down stores.
The loss compares with a net profit of HK$873 million for the previous year and is much larger than the HK$3.48 billion forecast in a survey by S&P Capital IQ.
Revenue for the year was down 14.1 percent at HK$25.9 billion, compared with HK$30.17 billion previously. This was largely the result of North America divestments and store closures.
Turnover from Esprit branded products fell by 10.5 percent on year.
Esprit has been battling to pick up strength in a tough market that includes Spain's Zara and Sweden's Hennes & Mauritz. In May, it had warned of a “substantial'' loss for the fiscal year.
Esprit said “the next financial year’’ is expected to be “a period of transition where we aim to stabilize our business performance and build the basis for a sustainable turnaround.''
The firm, founded in San Francisco in 1968, said in last year it would invest US$2.4 billion over four years as part of a transformation drive after suffering a 98-percent plunge in net profit in 2011.
Jose Manuel Martinez Gutierrez, a former senior executive at Spanish clothing retailer Zara, was appointed chief executive August last year after former CEO Ronald Van der Vis resigned.—AFP/The Standard