Esprit posts $460 million loss in ‘distressing’ year

Hong Kong-headquartered fashion retailer Esprit Holdings has reported an annual net loss of HK$2.339 billion ($460 million) following an “extremely difficult and distressing” year.

Revenue for the year ended December 31 was HK$5.912 billion, representing a 16 per cent decrease. Revenue from e-commerce, wholesale and retail all dropped by 14-20 per cent, while licensing sales remained relatively stable.

Operating expenses were HK$5 billion, up 44 per cent on the prior year, which was attributed to the reversal of the provision for inventories and  impairment losses.

The company cited the poor macroeconomic environment in Europe, particularly in Germany, the inability to reduce operating expenses, and the short-term effects of its restructuring efforts.

Other headwinds included ongoing geopolitical tensions around the world, particularly the conflict in Ukraine, and high energy costs which have been affecting consumer purchasing power.

The retailer ended the year essentially debt-free, with cash, bank balances and deposits of HK$435 million, representing a net cash decrease of HK$1.577 billion.

The company has launched multiple initiatives to improve profitability, but expects economic and geopolitical uncertainties to continue affecting global growth this year. 

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