CEO of Esprit's buy of shares rockets the stock

Esprit Holdings outsmarted Hang Seng Wednesday and rise 6.3% - the most in a month - on Hong Kong’s stock exchange after its chief financial officer increased his stake. The stock climbed to HK$8.91 at the close in Hong Kong trading

, the most since Oct. 27.

Esprit was the biggest gainer on the benchmark Hang Seng Index, which fell 2.1 percent. According to Reuters, Europe-focused fashion group Esprit Holdings Ltd surged 6.3 percent after its chief executive and chief financial officer raised their stakes in the company earlier this month, according to a disclosure from the Hong Kong bourse. Esprit has been under pressure amid increasing scepticism towards its turnaround plans, with shares down about 75 percent so far this year.

Chief Financial Officer Chew Fook Aun bought 100,000 shares in the maker and retailer of casual clothing that has seen its stock plunge 93 percent from its peak in October 2007 as European rivals Hennes & Mauritz AB and Inditex SA’s Zara lured customers away. “Senior management are buying shares with their own money, which is always heartening to see,” said to Bloomberg Matthew Marsden, head of Hong Kong and China consumer research at Daiwa Securities Capital Markets Co. “The presentation shows that management has a clear road map of how they intend to revitalize the brand in the next three years.”
Esprit posted a 98 percent drop in net income in the last fiscal year because of the cost of closing stores in Europe and selling its U.S. and Canada operations. Sales in the year through June increased less than 1 percent after declining in the previous two years, according to data compiled by Bloomberg.

Chief Executive Officer Ronald Van der Vis plans to turn the Hong Kong-based company around by improving fashion designs and doubling China sales in four years. Esprit is expanding in China to offset declining revenue in Europe, where it made 79 percent of sales in the fiscal year through June. Chew purchased the shares at an average price of HK$9.18, increasing his holding to 4.2 million shares, according to data on the website of Hong Kong Exchanges & Clearing Ltd. On Nov. 11, Van der Vis had purchased 300,000 shares at an average price of HK$10.632, according to the website.

Angela González-Rodríguez