Esprit: Shift to licensing model results in drop in revenue

The former clothing group Esprit recorded a significant drop in revenue in the past six months. This is due to the elimination of licensing revenue from European trademark rights.

Esprit continues to shrink

Following the global insolvencies and closures of branches and stores last year, Esprit Holdings Ltd. in Hong Kong now only manages the licences for the Esprit brand. In the first half of the year, the company recorded a decline in revenue from 49.6 million Hong Kong dollars to 6.6 million Hong Kong dollars compared to the same period last year.

The company attributed the decline in revenue to the elimination of licensing revenue from European trademark rights. Following the insolvency proceedings of the company's former German subsidiaries last year, these are no longer included in the balance sheet, according to a business report last week.

The bottom line was a profit of around 22 million Hong Kong dollars from the discontinued operations after significant cost reductions, of which 1.3 million Hong Kong dollars is attributable to the shareholders.

Following the closure of operational business activities worldwide, the company now only employs the equivalent of approximately 38 full-time employees. A year ago, there were more than 500 employees.

Back in China

Esprit Holdings Limited retains the trademark rights for all regions outside Europe and intends to further expand its licensing-oriented brand management business.

A few months ago, a licensing agreement for the Chinese market was signed. The business partner, not named in the annual report, is now focused on building a presence on major e-commerce platforms such as Tmall, Douyin, JD.com and Vip.com. At the same time, the autumn/winter 2025 collection is being developed, and the licensing partner is already reviewing potential sublicensees for certain product categories.

A licensing partner has also been found for the North America region. The existing licensing agreement for Latin America has also been renewed.

Insolvency in Canada

In the first half of the year, the company also ceased its business activities in Canada with the initiation of insolvency proceedings in June and is also focusing on the licensing business there.

Esprit Holdings expects rising revenues from the licensing model in the future, primarily through proceeds from the expansion in China.

In the future, the company wants to continue to promote the licensing business with further partners, but also examine opportunities to expand its brand portfolio.

This article was translated to English using an AI tool.

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