Fashion group Esprit says H1 loss widens on brand weakness

Esprit Holdings

26/02/2019 10:02

HONG KONG, Feb 26 (Reuters) - Fashion group Esprit Holdings
Ltd  0330.HK  on Tuesday posted a bigger loss for the first half
amid changes in consumer behaviour, price competition and
reduced customer traffic across its distribution channels due to
weakness of its brand.
    The Europe-focused clothing retailer reported a net loss of
HK$1.77 billion ($225.5 million) for the six months ended
December, including a HK$924 million loss on provision for store
closures and leases. That compared with a net loss of HK$954
million in the year-ago period.
    Revenue slid to HK$6.77 billion from HK$8.04 billion.
    Esprit said in November that it would cut about 40 percent
of its non-store jobs and reduce the number of products it sells
in stores as it restructures in the wake of tough competition
from online and fast-fashion retailers.  urn:newsml:reuters.com:*:nFWN1Y10HB
    To deal with the challenging environment, the apparel group
said it would shut loss-making stores, restructure cost base and
improve products offering, while time would be needed to draw
customers back into its stores.
    "Looking ahead, the group expects the next two financial
years to be a period of transition," Esprit said in a filing to
the Hong Kong bourse, adding underlying operating profit was
expected to achieve breakeven in two to three years' time.
    The group expects its revenue to further decline in the next
two financial years due to closure of loss-making stores.
    Shares of Esprit have risen 30.8 percent so far this year
after a 62.74 percent plunge in 2018. That compared with an 11.3
percent gain in the benchmark index  .HSI  so far in 2019.

 ($1 = 7.8494 Hong Kong dollars)

 (Reporting by Donny Kwok; Editing by Gopakumar Warrier)
 ((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters
Messaging: donny.kwok.reuters.com@reuters.net))