HONG KONG: Esprit cautious despite swinging to H1 profit
- Company swings to H1 profit of HKD95m
- Turnover fell 5.5% to HKD12.81bn
- Second-half performance "remains uncertain"
Hong Kong fashion brand Esprit has returned to profit in the first half as efforts to overhaul its operations start to gain traction, but warned the second half of the year "remains uncertain".
The company's net profit reached HKD95m (US$12.2m) for the six months ended 31 December, compared to a loss of HKD465m in the same period of the prior year.
Turnover, however, fell 5.5% to HKD12.81bn from HKD13.55bn last year in line with store closures. In local currency turnover fell 9.3%
Retail sales in Europe grew 0.1% year-on-year in local currency and excluding store closures. But the group's wholesale performance in Europe and in the Asia Pacific region has not yet stabilised, the company added.
CFO Thomas Tang said: "It is through the combined and committed efforts of the management team to reduce cost that we achieved over HKD1bn in savings in the first half of the financial year, which enabled the group to return to profitability.
"We will be able to leverage this reduced cost base when the high performance product engine is in place."
Esprit said it will continue with efforts to stabilise its performance by adopting a faster and more efficient vertically integrated business model.
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