HONG KONG — Esprit Holdings Limited reported higher profitsfor its most recent fiscal year, but saw shares drop by as much as 8.8percent Wednesday after it missed analysts’ forecasts.
Espritsaid net profit for the 12 months ended June 30 grew more than 11 timesto 873 million Hong Kong dollars, or $111.8 million, from theyear-earlier figure of 79 million Hong Kong dollars, or $10.1 million.Though higher, the net profit fell short of consensus analysts’ opinionforecast of 995.8 million Hong Kong dollars, or $128.4 million, to 1.01billion Hong Kong dollars, or $130.4 million.
Esprit said thecost of divesting its North American operations were less thanpreviously forecast and the company was able to book a write-back of 696million Hong Kong dollars, or $89.7 million, on a provision made forstore closures. Meanwhile, marketing expenses rose to 1.57 billion HongKong dollars, or $206 million, from 984 million Hong Kong dollars, or$126 million, in the previous fiscal year.
Operating profit alsoimproved significantly, jumping 69.2 percent to 1.17 billion Hong Kongdollars, or $149.77 million, while sales for the period declined 10.7percent to 30.17 billion Hong Kong dollars, or $3.86 billion. The HongKong dollar is pegged to the U.S. dollar.
The shares closed onthe Hong Kong Stock Exchange at 12.34 Hong Kong dollars, or $1.58, down6.9 percent.
Esprit chairman Raymond Or voiced a cautious outlookfor the future.
“The operating environment is likely to remainchallenging in the new financial year with the unresolved European debtcrisis and the slowdown in China’s economic growth,” he said. “We willexert vigorous efforts to ensure that the initiatives will produceresults at an even faster pace and create an inspiring shoppingexperience for our customers.”
Speaking at his last Esprit pressconference, outgoing chief executive Ronald Van der Vis went overdetails of the company’s progress on the transformation plan.
Espritmade “tangible progress” in the first year of the transformation planand the company is “laying a strong foundation for future growth,” hesaid.
Under Van der Vis, the company unveiled an ambitious planlast year to improve the “fashionability” of its brand, which it hasacknowledged has lost its appeal with shoppers. The company has exitedthe North American market and is focusing on Asian and select Europeancountries for future growth.
Van der Vis said Wednesday thatsales generated by a London-based new trends division have been betterthan expected, with sell-through more than double that of othercollections. Given the warm reception, the company is planning to rollout the collection to Asia and expand to a men’s trends collection.Esprit is also talking to wholesalers. Van der Vis wouldn’t divulge themargins on the trends collection, saying only that the emphasis is onexceeding customers’ expectations and on providing good value.
Thecompany has also opened a Hong Kong-based design hub to create designsfor mainland China. China now makes up 8.6 percent of total grouprevenue, up from 7.9 percent in 2011, and the company intends to expandits presence in China from 191 cities to 400 by 2014/2015 and increasepoints of sale from 1,013 to 1,900.
Esprit also said it hassuccessfully centralized its buying functions, putting it on track toachieve annual savings of 1 billion Hong Kong dollars, or $128.9million, by 2014/2015. As part of this centralizing, Esprit has reducedthe number of suppliers by 21 percent, the number of factories it workswith by 29 percent and also successfully reduced its rejection rate byhalf. The company is expanding its sourcing footprint to new marketssuch as China, Bangladesh, Indonesia and India while reducing its shareof sourcing agents by 28 percent
New chief executive officer JoseManuel Martinez Gutiérrez was present at the press conference and made afew introductory remarks. Gutiérrez, a veteran of Inditex, has been onthe job only 10 days, so he kept his remarks short. He said he “fullyagrees with the fundamentals of the transformation plan” but couldn’tyet give specifics on what changes may be made in the future.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)