Esprit’s net loss widens, revenues drop by 16 percent

Hong Kong-based fashion retailer Esprit Holdings posted an annual net loss of 2.3 billion Hong Kong dollars.

Revenue for the year to December 31, 2023, declined by 16 percent to 5.9 billion Hong Kong dollars.

Esprit said in a statement that the group’s performance was severely impacted by the unrelenting poor macroeconomic environment in Europe, particularly in Germany, the inability to reduce operating expenses due to long-standing historical structural issues and the short-term detrimental effects of the group’s restructuring efforts, which was intended to ensure a brighter future for the company.

The company added that the decrease of revenue was mainly attributable to the unfavourable macroeconomic environment in Europe, particularly in Germany, the on-going geopolitical tensions around the world, particularly the conflict in Ukraine; and high energy costs, particularly in Germany.

Esprit’s ecommerce, wholesale and retail revenue dropped by 16 percent, 20 percent and 14 percent, respectively. Licensing revenue remained relatively stable at 125 million Hong Kong dollars.

For the year, gross profit margin was 42.4 percent, equivalent to a 1.7 percent point ramp up versus the corresponding Year. The company’s basic and diluted loss per share widened to 0.83 Hong Kong dollars.

The company’s board considers that the significant increase in loss is mainly attributable to the decrease in revenue cited above, leading to the decrease of the gross profit to 2.5 billion Hong Kong dollars for the year under review.