Luxury brand Espirit FY'13 profit down 14.1%

The turnover from edc branded products reported a decline of -14.6% year-on-years in local currency. This underperformance is partly attributable to the slightly higher mix of wholesale turnover (40.9%) as compared to the Esprit brand (38.2%) and to the larger impact of the reduction of selling space in the Retail stores of the Group.

Retail turnover amounted to HK$15,652 million (2012: HK$17,806 million) and decreased by -12.1% year-on-year. Excluding impact from currency exchange rates, the Divestment of NA and the Store Closures, retail turnover declined by -3.5% year on year. This decline is mainly attributable to a comparable store sales decline of -3.3% as a result of a significant decline of footfalls in our stores. Comparable stores represented approximately 40% of total retail space.

Tactical sales activation initiatives were more ambitious since the middle of the financial year to improve store traffic and conversion rate. These initiatives contributed to the narrowing of the rate of retail turnover decline to -1.6% in the Second Half in local currency (First Half: -5.1%).

We are encouraged with this development that was observed in both Europe and the Asia Pacific regions. Excluding impact from the Store Closures, the retail turnover decline in Europe and the Asia Pacific narrowed in the Second Half to-1.4% (First Half: -4.9%) and -2.2% (First Half: -5.5%) in local currency respectively.

This improving trend is even more apparent in China, our third largest retail market, where we saw a positive retail turnover growth of +4.4% in the Second Half (First Half:-0.2%).

Esprit