More cuts
The fashion company managed a 95 million Hong Kong dollars net profit in the first half of its fiscal year (until 31 December 2013). The 8.8 million euro profit is a huge turnaround compared to the year before, when Esprit lost 465 million Hong Kong dollars (43.75 million euro). Despite the positive surge, turnover did drop 5.5 % to 12.8 billion Hong Kong dollars (some 1.2 billion euro).
For the second part of the fiscal year, Esprit expects turnover to slide even further, citing a “very challenging” operating environment, while it will also close several French stores as the country is in a “difficult” economic situation. “There’s no end to cost reduction measures”, which have helped to save 1 billion Hong Kong dollars (94 million euro) in the first half of the fiscal year.
Asia suffered the biggest drop in turnover, 21 % lower, mostly because China (Esprit’s third largest market) performed abysmally. Europe represents 80 % of Esprit’s total turnover, but lost turnover (5 % in local currency) in the first half of the year because of the economic situation and fierce competitors (H&M and Zara, for example).
