Esprit: a European sales decline limited to 6.2 %

By

Bruno Joly

Published
May 1, 2014

Esprit is gradually turning over a new leaf after years of turmoil, even while the first few months of 2014 have not proven incredibly bright. From January to March, the period corresponding to the company’s third quarter, sales fell by 9.9% to 555 million euros (6 billion Hong Kong dollars). At constant exchange rates, the decline amounted to 12.7% according to preliminary data.

But in its financial statement, the group said that total retail floor space has diminished more than 10% following efforts aimed at optimizing profitability. Moreover, its underachievement may also be explained by the timing of results as well as difficulties encountered in Asia.

As regards floor space, since April 1, 2013, Esprit has closed 113 branches (19 in Europe) and 378 franchise stores (109 in Europe).

Taking a closer look, Esprit, which was in a rather bad position, seems to be doing better. This may be evidenced by the situation for European branches that are planned for closing.

In the first 9 months of its fiscal year, which began on July 1, the store brand’s retail activity declined at constant exchange rates by only 1.5% to 790 million euros (8.5 billion HK dollars). Europe appears to have come to the rescue this time, given that retail in Asia Pacific has fallen by 15.3% to 223 million.

Directly owned stores planned for closing account for 50 million. In terms of wholesale, however, Esprit is still experiencing difficulties. Business activity in Europe has fallen in Europe by 11.7% to 613 million and 44% in the Asia-Pacific.

Overall, from July 2013 to March 2014, Esprit saw total sales drop by more than 10% to 1.75 billion euros (18.8 billion HK dollars). Women’s fashion is down 5.1%, making up 41.7% of the total group, menswear has dropped 16.1%, making up 15%. EDC and other product categories of products have not seen much change.