The First Quarter Revenue Fell By 16%, And Asia Pacific Stores Halved For Two Years.

Once fashionable by consumers, the clothing tide brand "Esprit" is now struggling to find the path of pformation.

The flag has two Esprit and EDC

Hong Kong listed companies's HK 00330 has just released a quarterly report in fiscal year 2015, which shows that its turnover has dropped by 16% over the same period last year.

According to reporters, the performance of Si Jie global has been sluggish for a long time, and the share price of the company has also fallen for 7 years.

The success of its pformation has become an issue of concern to investors.

We should know that although the market value is less than 20 billion Hong Kong dollars, it is no longer the same as the heyday, but it is still the Hang Seng integrated midsize stock that belongs to Shanghai and Hong Kong.

Asia Pacific sales fell 22% in the first quarter

Last Friday (October 31st) evening, Si Jie global released the first quarterly report of the new fiscal year (2015 fiscal year). As of September 30, 2014, the first quarter revenue fell 16% to HK $5 billion 478 million, of which Esprit brand income fell 16.08%, EDC fell 17.39%; other growth categories (shoes, children's clothing) increased in the same period last year, a 15.57% decline this year.

Looking back at the first quarter of fiscal year 2014, the revenue of Si Jie global declined 0.8% to HK $6 billion 552 million, and the sales of Esprit women's wear, men's wear and EDC brand were 7.2%, 17% and 7.4% respectively.

However, other income, including shoes, accessories, baby wear, children's wear and sports series, has reached 33.5%.

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In the first quarter of fiscal year 2015, sales in all parts of the company declined, with sales in Germany falling by 13.98% to HK $2 billion 596 million, and in other parts of Europe by 17.16% to HK $2 billion 143 million.

The most significant decline in the Asia Pacific region was 22.33% from HK $706 million to HK $706 million in the same period last year.

Not only that, the total controllable area of Si Jie (Esprit wholesale management team's controllable sales outlets, including wholesale customers' exclusive stores, retail counters and franchised counters) is decreasing.

In the first quarter of fiscal year 2015, the net sales area of Si Jie global decreased by 6.3% compared with the same period last year, while the controllable area of wholesale business decreased by 14.5%.

For the Asia Pacific region, it can always be controlled.

A sharp decrease of 32.3%.

Data show that in the first quarter, there were 409 special stores and retail counters in the Asia Pacific region, down 209 from October 1, 2013.

In the same period last year, the control area in the Asia Pacific region has dropped by 17.9%, and the number of shops has dropped by 200. That is to say, in a short span of two years, the number of controlled shops in the Asia Pacific region has dropped by half.

The new pformation plan is being pushed forward.

The heyday of Si Jie seems to be gone forever.

According to the statistics of reporters, the stock price of Si Jie world hit a record high of HK $133 in 2007. It is the only blue chip stock in the Hong Kong stock market.

But with the decline in performance, the company's share price fell all the way, and now it is only up to HK $10.

Looking back from 1993 to 2008, the composite growth rate of net income and net profit of Si Jie reached 22% and 45% respectively, but from 2009 to 2012, its profitability declined for 4 consecutive years, and its share price fell more than 90% in 3 years.

In the 2013 fiscal year, the global capital was selected out of blue chips and its performance was the worst in history: a huge loss of HK $4 billion 388 million.

This is the first loss of the global market since its listing in 1993, and it is also the most difficult financial report of the world.

In order to reverse the downward trend of performance, the global management announced that it would formally abandon the investment plan of HK $18 billion 500 million which was launched in 2011 and launch a new 3 year pformation plan for 2014~2016. This year is the first year of the new plan. It is noteworthy that the SWC has made a profit in the 2014 fiscal year. In the 2014 annual report issued by the company in October this year, the new vertical integrated business model was officially launched in July 2014, while the wholesale partners reacted well to the products and the new operation mode.

The company said that the company has implemented this "efficient product engine" and established a faster and more efficient product development and supply chain process, which is called "the key to Esprit's success in turning losses into profits and regaining competitiveness in the long term".

JP Morgan Holdings

Company performance fell, one of the company's important shareholder Morgan chase recently reduced the company's shares.

According to the HKEx data, in September 3rd, J.P. Morgan reduced the number of good positions from 179 million shares to 172 million shares, and the proportion of good warehouse holdings decreased from 9.20% to 8.83%.

JP Morgan said in a report that the number of businesses in the next 12 months will fluctuate sharply due to the launch of several major projects at the same time.

JP Morgan said that how to apply vertical business mode to wholesalers customers is still facing challenges.

In addition, the company's retail business has been implementing a new business model since July. However, management points out that the product has not fully implemented the elements of fast fashion, and the time needed to design some products from the design to the delivery branch still takes 6~8 months. In the long run, the management will maintain it for 5~6 months.

JP Morgan predicts that in the 2016 fiscal year, the sales growth of Si Jie global stores will reach 3% to 4%. By 2020, the EBIT profit rate will reach 6%, but in view of the above concerns, it is believed that the risks faced by the forecast increase.

Reiterated its "reduction" rating and lowered its target price from HK $11.3 to HK $8.5.

However, there are also institutions that have confidence in the future of Si Jie global.

If HSBC Global pointed out that the global financial year's performance in the 2014 fiscal year is better than expected, it is believed that the group has completed the target of cost reduction. In the current financial year, it can develop its vertical business mode more efficiently, with the target price rising from HK $16.4 to HK $20, reiterated the rating "overweight".

As of Friday's close, its shares were HK $9.71, down 3.67%.