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Weak consumer confidence, the war in Ukraine and investments in brand repositioning are causing Esprit to post hefty losses on top of falling sales. Nevertheless, the fashion retailer expects a turnaround in the second half of the year.
Discounts and investment
Esprit sales fell 17 % to 3 billion Hong Kong dollars (350 million euros) in the past six months, a drop the retailer said was due to negative consumer sentiment in Germany and the rest of Europe. The difficult economic context and the war in Ukraine are weighing on consumer confidence, the company says.
Net loss was 714 million Hong Kong dollars (84 million euros), compared to a profit of 13 million Hong Kong dollars a year earlier. The company said it had to allow for major discounts. Moreover, to reconnect with its historical strengths, Esprit is investing in a thorough repositioning, shop openings, digitisation and new collections.
This has already led to encouraging signs in June, according to the fashion company. Additional initiatives in the second half of the year should put the retailer back on track for profitable growth.
