Fashion brand Esprit has announced truly dismal figures: sales have fallen from 3.6 to 2.5 billion Hong Kong dollars, with net profit also plunging deep below zero. Still, the fashion brand believes in improvement later this year.
Profit short-lived
The fashion group attributes the 30 % decline to 2.5 billion dollars (290 million euros) mainly to “negative consumer sentiment” in Germany and the rest of Europe, but admits that the decrease is also partly its own doing.
Since Chinese billionaire Karen Lo became the brand’s biggest shareholder during the corona pandemic, Esprit has been working on a new strategy. The fashion retailer wants to position itself higher, but still keep prices low and target a young, hip audience. To achieve that, the label is cutting costs and especially the number of suppliers.
In the short term, however, the strategy is mainly hurting the group. Expected net profit actually plummeted to 604 million HK dollar below zero (- 70 million euros) due to the drop in sales. Last year, Esprit made a profit for the first time since 2017, but that was short-lived. A better future is on the horizon, the company maintains: in the second half of this year, the investments should start to pay off. For instance, positive developments are reportedly starting to show. Also, Esprit is looking forward to its new denim line, which will be launched in August.
