Fashion retailer Esprit has had to deal with a sizeable turnover drop in the past quarter because of negative exchange rate fluctuations. If those are taken out of the equation, the company's turnover only dropped slightly. Regardless, the fashion company has to fight off serious setbacks in Europe and Asia.
Own stores perform better than wholesale
Esprit, listed on the Hong Kong exchange market, finished its quarter (until the end of September) with a 4.6 billion Hong Kong dollar turnover, some 545 million euro. That is a 14.9 % turnover drop compared to the same quarter last year, but exchange rates have negatively influenced those numbers. Without them, the turnover drop would have been a minimal 0.4 %.
Considering the fact its own retail store network has shrunk in floor size (-7.6 %), this is not a bad performance for Esprit. "Our well received Autumn/Winter collections, together with our #ImPerfect brand marketing campaign and omnichannel initiatives, are the key drivers behind the increase in retail sales, both online and offline", the group says in its quarterly update.
There are bigger problems in its wholesale branch: quarterly German turnover dropped 8.1 % which is a worrying sign in the market that still contributes about half of the group's turnover). Things are not better elsewhere, with European turnover down 9.5 % and Asian turnover plummeting 36.8 %. All in all, that is a combined 12.3 % turnover drop, which pretty much follows the drop in floor space (-11.9 %). The group did emphasize this is "important to clarify that it is the result of wholesale orders placed some 6 months ago and it does not reflect the actual sales to end consumers through this channel."