• H1 net profit down 5% to HK$2.7bn
  • Turnover falls 3.1% to HK$18.5bn
  • Hails buy-out of Chinese joint venture

Fashion retail group Esprit Holdings posted a 5% drop in first half net profit, but said it was “encouraged” by a growth in retail turnover.

The Hong Kong-based company announced that net profit in the six months to 31 December had fallen 5% to HK$2.7bn (US$348m), while turnover dipped 3.1% to HK$18.5bn.

Esprit CFO Chew Fook Aun said the company’s wholesale order book showed a mid-teens percentage decline in local currencies for the January to April 2010 period, but added that the trend was improving “month by month”.

A 9.5% year-on-year growth in retail turnover was “encouraging”, he said.

Esprit CEO Ronald Van der Vis hailed the company’s acquisition of the remaining interest in its Chinese joint venture as “an important development for the group, as China is one of the biggest and fastest-growing apparel markets in the world”.

He added: “It is also an important step for Esprit in becoming a truly global company as our presence in Asia-Pacific will be strengthened significantly and hence it will balance our geographical spread further.”

Esprit recently secured a HK$2.6bn loan to acquire China Resources Enterprise’s 51% stake in Esprit China.