• H1 profit slumped 73% to HKD555m (US$71.6m)
  • Revenue fell 5.6% to HKD16.6bn
  • Operating margin above guidance at 4.7%

Fashion retailer Esprit today (23 February) reported a sharp decline in half-year net income as the struggling retailer reassured shareholders that turnaround plans remain on-track.

The company said profit slumped 73% to HKD555m (US$71.6m) in the six months to 31 December, from HKD2.1bn in the same period last year.

Revenue fell 5.6% to HKD16.6bn. But the company said its operating margin of 4.7% was well above the full-year operating margin guidance of 1-2%.

Last September Esprit unveiled plans to revive its brand and close unprofitable stores, and it now says it is "pleased and confident with the progress made so far".

It added that over half of the 80 planned store closures have been completed, with the remainder in final negotiations.

When it announced the transformation plan, the company also said it would look to divest its North American operations. But it has now decided to wind down the business rather than selling it, as it is "not willing to compromise on brand positioning and distribution channels".

The wind-down of the North American stores is expected to be finalised by 31 March, and will involve the closure of 41 full-price retail stores and 53 outlets.