Hong Kong-based clothing retailer Esprit Holdings Ltd. slipped deeper into the red in the 2023 financial year despite extensive reform efforts. This emerges from preliminary figures that the company published on Tuesday.
Based on the available, as yet unaudited results, management currently expects a net loss attributable to shareholders of 1.90 billion Hong Kong dollars (225.8 million euros) for 2023. The deficit was almost three times as high as in the previous year, when it was 664 million Hong Kong dollars.
Annual sales fall by around 16 percent
The company cited significant sales losses as the reason for the record loss. In addition, it was not possible to reduce operational costs due to “long-standing historical structural problems”.
According to current expectations, annual sales amounted to 5.91 billion Hong Kong dollars (702 million euros). This corresponded to a decrease of around 16.3 percent compared to 2022.
The “unfavorable macroeconomic environment in Europe and especially in Germany” has weighed on demand, the clothing supplier explained, pointing to “high interest rates as a result of strong inflationary pressure” and the increased energy prices, especially in Germany, which have an impact on the purchasing power of consumers would have had an impact. In addition, there are “ongoing geopolitical tensions” such as the war in Ukraine.
The company plans to present its final annual results in March.