Esprit group turnover dives in H1 12/13

Esprit, a global fashion brand, has reported that it suffered

heavy losses in group turnover for the six months ended December 31, 2012 with a decrease of below 13.4 percent in local currency to 13,554 million Hong Kong dollars (Rs 9,410 crores), from 16,699 million Hong Kong dollars (11,597 crores) recorded for the six months ended December 2011.

Europe remained the group’s biggest region in terms of turnover. Excluding the divestment of North American operations and store closures program, Europe accounted for 77.9 percent of total group turnover and reported turnover declined of 9.1 percent year-on-year in local currency. The Asia pacific region performed relatively better than Europe and reported turnover decline of 7.2 percent year on year in local currency. The decline was mainly attributable to a 11.2 percent decline in local currency sale in china. Asia Pacific region accounts for 19.8 percent of the group turnover.

In North America, as a consequence of closer of its loss making operations, turnover from the region decreased by 79.6 percent in local currency to 130 million Hong Kong dollars (Rs 86 crores) (1H FY 11/12: 640 million Hong Kong dollars/Rs 441 crores). The groups retail turnover was 8,102 million Hong Kong dollars/Rs 5,623 crores (1H FY 11/12: 9,844 million Hong Kong dollars//Rs 6835 crores) representing a decline of 13 percent year-on-year basis and 5.1 percent in local currency.

The group recorded a gross profit of 6,910 million Hong Kong dollars/Rs 4,793 crores (1H FY 11/12: 8,491 million Hong Kong dollars/Rs 5, 892 crores) reflecting a gross profit margin of 51 percent (1H FY11/12: 50.8 percent). During the second half of the calendar year 2012, the market environment was difficult, but the group continued to focus on executing its transformation plan in order to improve Esprit's business. While the group has seen improvements in its product, supply chain, store concept and relationships with its business partners, it is important to remember that most initiatives in the transformation plans are still working in progress.

Commenting on the results, Jose Manuel Martinez Gutierrez, the group CEO of Esprit, said, “The fundamentals of the transformation plan are sound: the repositioning of the brand back to its aspiration heritage, the upgrading of our product value for money and the enhancing of the shopping experiences in our stores and point of sales are the best possible ways to strengthen the value proposition for our customers. Therefore, the management team will continue to work on these key initiatives.”