ESPRIT HOLDINGS: EXPANSION DROVE 146.4% GAIN IN PROFIT
Byline: James Fallon
LONDON — Esprit Holdings Ltd., the apparel company based in Hong Kong, said Monday that aggressive expansion in Europe and the Far East resulted in a 146.4 percent leap in after-tax profits, to $61.2 million on a 17.8 percent increase in sales to $771.2 million for the year ended June 30.
This compares with after-tax profits of $24.8 million on sales of $655.3 million a year earlier.
Esprit Holdings controls Esprit de Corp. operations in the Far East, Europe and Canada. The company, which is separate from Esprit U.S., listed its shares on the London Stock Exchange last December. The shares also are listed in Hong Kong. Esprit Holdings is headed by Michael Ying.
Ying said in a statement that the company grew in every region and in every product category. Growth was helped by the performance of Esprit’s newer collections: Esprit Kids, its junior line EDC and its bodywear line, which was launched last December in a licensing deal with Triumph.
It also has signed a license for fragrances and cosmetics with Coty, which will be launched late next year.
Esprit Holdings now has 91 company-owned freestanding stores in Europe and 600 franchised stores. In the Far East, it operates 283 company-owned and 105 franchised stores. Overall, the company added 153,000 square feet of new retail space during the year, the majority of this in Europe.
An Esprit spokesman declined to reveal the total number of stores the company opened last year or the number it expects to add in the current financial year. However, it plans to open a 20,000-square-foot flagship store in Stuttgart in the next few months, which will be its largest store in Europe. Further megastores in major cities in Europe and the Far East are expected to follow, Ying’s statement said.
Esprit’s European sales totaled $454 million last year and it expects sales in Europe to reach $534.3 million in the current fiscal year. Dollar figures are all translated at current exchange from the Hong Kong dollar, except for the European sales total, which is translated from the German mark.
The growth in Europe, Esprit said, will be fueled by further increases in its core markets of Germany and the Benelux countries; the opening last year of two new stores each in France and Scandinavia, and the re-entry into the U.K. this year via a wholesaling deal with the John Lewis department store chain. Esprit will deliver its collections to six John Lewis stores beginning in December.
The company’s sales in the Far East last year rose 17 percent to $283.2 million, fueled mainly by large increases in Australia and Taiwan as well as growth in Singapore and Malaysia. Esprit pulled out of Japan during the year and cut back the number of its stores in South Korea to one from 32. It said it plans to rebuild its presence in those markets at a future date.
Esprit did not reveal the sales of its Canadian operations but said sales rose 5 percent in Canadian dollars and were flat in Hong Kong dollars. Ying described Esprit Canada, which is 75 percent owned by Esprit Holdings, as the company’s “window on North America.” The company has spent the last year reorganizing its wholesale operations, improving efficiencies and shifting its focus to the western coast of Canada where the brand is better known, he said.