Struggling Esprit to Shut Hong Kong Flagship and Causeway Bay Location
HONG KONG–Beleaguered apparel company Esprit Holdings is due to scale back its store presence significantly in Hong Kong, where the company is listed, and will close its Peking Road flagship and a Causeway Bay location in coming months, a source said.
On Thursday, the company issued a profit warning, alerting investors that for the six months of 2017, it expects to record a net loss in the range of 950 million to 980 million Hong Kong dollars ($121.5 to $125 million), as compared to a net profit of $61 million Hong Kong dollars ($7.8 million) in the same period last year.
Esprit’s three-storey 1,000 square meter (about 10,700 square feet) flagship store is near Tsim Sha Tsui’s famed shopping street, Canton Road, popular with tourists especially from mainland China but it suffers from poor foot traffic, according to the source. First opened in 2009, the store has been unable to draw shoppers away from the hub of Harbour City mall just one street away; pedestrians need to use an underground passageway to cross the road and reach the Esprit flagship from Canton Road.
Esprit declined to comment on the store closures.
The company, which has been attempting a turnaround for years, blamed its poor performance of brick and mortar retail stores in the last quarter of 2017, a taxation expense, and the full impairment of its China operations realized.
Its business in Asia has fallen off substantially in recent times. Per the last quarterly results announced in September, Germany made up just over half of its revenue, the rest of Europe approximately 40 percent, and Asia Pacific just 10 percent. Wholesale figures nearly 40 percent of revenue.
Its next interim results announcement is set to be released before Feb. 28.
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