• Losses reached HKD4.3bn
  • Sales fell 11.5% to HKD25.9bn
  • Excluding store closures, sales were down 7.7% to HKD25.52bn 

Hong Kong-based clothing brand Esprit has re-set its strategic objectives after swinging to a wider than expected full year loss on slumping sales and store closures.

Net losses reached HKD4.3bn (US$554.5m) over the year ended 30 June, against a profit of HKD873m last year.

Sales fell 11.5% in local currency terms to HKD25.9bn, mainly due to a decline in Europe as well as the decision to shutter its North American operations. Excluding the impact of the store closures, turnover fell 7.7% on the prior year to HKD25.52bn.

Esprit's management also revealed that it has undertaken a comprehensive re-assessment of its original transformation plan, and new strategic priorities have been set moving forward.

The short term goal is to stabilise the business by reducing costs, normalising inventory levels and overhauling core operations, the company said.

It also  plans to install a "high performance product engine", to increase the speed of new designs to market in the medium term, as well as developing a platform for future growth, with a focus on developing the business in China.

"During a difficult year, we have continued to set, step-by-step, an ambitious course for regaining our competitiveness, said group CEO Jose Manuel Martinez Gutiérrez.

"We are aware of the great challenge ahead of us but also mindful of the immense potential for Esprit. The second half of the financial year has indicated that we are indeed on the right track. We will remain focused on this path and will continue to work harder on the company's strategic initiatives."