Chinese fashion brand Esprit back in black as it cuts costs amid major restructuring
Fashion retailer Esprit Holdings swung to a first-half profit from a loss in the year-ago period as the clothing company trimmed operating costs - but weak consumer demand due to a slowing Chinese economy and tough online competition hurt revenue.
The Europe-focused retailer is in the midst of an ambitious multi-year revamp that has included store closures, price adjustments, new return policies, and technology and distribution improvements.
Esprit has been actively restructuring its retail footprint and reduced promotional activity in Asia Pacific amid lower consumer traffic in the region, while unusually warm weather in Europe also affected its sales.
The company said on Wednesday it posted a net profit of HK$61m (€7.5m) for the six months ended in December, compared with a net loss of HK$238m for the same period a year earlier. Revenue for the period was HK$8.32bn, down from HK$9.3bn a year earlier.
"The economic growth slowdown in China has dampened consumption sentiment, resulting in reduced traffic to the malls across the region, including shopping and tourist destinations that are key for Esprit," the company said in a statement to the Hong Kong stock exchange.
Esprit shares are up 2.8pc so far this year after a 29pc drop in 2016. (Reuters)