Esprit, the Hong Kong-listed global fashion label, has reported a loss attributable to shareholders of US$91 million in the first half of the financial year. 

Revenue fell 17 per cent from US$462 million last year to $385.6 million, although the cost of purchases also fell, by $37.5 million. Most of the decline in sales occurred in Europe, where Esprit said the war in Ukraine has dented consumer sentiment.

In a report to shareholders, chairperson Christin Chiu cited “adverse trading conditions” during the first half but said a “series of progressive initiatives to reinvigorate growth over the past half year” should pay off in the second half, with June sales figures reflecting “noticeable positive developments”. 

She said the company was continuing to streamline its operations, including closing non-profitable stores and renegotiating rents where possible. Product lines with low gross profit margins have been phased out and replaced with collections and capsules with “substantially higher margins”. 

Chiu said that relocating the company’s global marketing and branding headquarters to New York has helped improve the brand’s image and attract new customers, especially in younger demographics. 

A global IT and tech innovation headquarters has been set up in Amsterdam as Esprit looks to incorporate an omnichannel structure and offer an “attractive and user-friendly e-commerce experience”. 

There is also an ongoing focus on expanding into North America, a market Esprit sees as key and that will “significantly contribute to the group’s revenue and profit in the near future”.  

“The financial results of the company … are unsatisfactory as a result of the detrimental factors identified earlier. However, management has begun instigating bold corrective actions,” said Chiu. 

“[With] this, combined with staff dedication and agility in the workplace, the group is confident that it will return to profitability and move towards a brighter and more exciting future.”