Clothing retailer Esprit Holdings Ltd. started the 2023 financial year with sobering results. According to the unaudited figures available, the company suffered a net loss of HK$604 million (EUR 70 million) from January to May, the group said in a profit warning published on Friday.
In the entire first half of the previous year, Esprit had achieved a corresponding surplus of 13 million Hong Kong dollars. However, the entire 2022 fiscal year ended with a deficit of HK$664 million.
The company justified the latest losses with the recent weak business development. In the first five months of the current year, sales amounted to approximately HK$2.51 billion (EUR 293 million), after reaching HK$3.63 billion in the first half of 2022.
The company laments the poor consumer mood in Europe and hopes for the effects of the latest reforms
“The decline is primarily due to negative consumer sentiment in Germany and the rest of Europe resulting from the weak economic environment and the ongoing conflict in Ukraine,” the statement said. In addition, “short-term adjustments” to the measures to strengthen the brand position weighed on the result.
However, the management continues to rely on the fact that the reforms recently introduced “will bear fruit in the second half of the year”. Their implementation has already triggered “noticeable positive developments”, explained the clothing supplier.
According to the company, it is still working on its figures for the month of June. The group intends to present its full half-year results by the end of August.