Esprit Net Profit Slump Pformation Late

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In February 23rd, the brand's Si Jie Global Holdings Limited announced interim results. Net profit in the first half of fiscal year ended December 31, 2014 plunged 50.5%, from HK $95 million in the same period last year to HK $47 million in 2015.

Insiders pointed out that despite the great determination of Si Jie's reform, at present, the road to recovery of Esprit is difficult.

China market

Turnover reduced by 20%

In the first half of fiscal year,

The performance of its series of products is not satisfactory, of which Esprit women's wear, men's wear and EDC brand sales are down by 14.2%, 19.3% and 16.6% respectively.

Sales of other accessories such as accessories, children's clothing and so on have also declined.

According to the data released by Si Jie global, its turnover in the largest market in the Asia Pacific region, the Chinese market, has been reduced by 21.6%.

For reasons of poor performance, Si Jie said that sales revenue declined by 16.3% in the first half of fiscal year 2015, down from HK $12 billion 810 million to HK $10 billion 716 million in the first half of last year due to reduced sales space, abnormal European warm weather, China's return agreement and unfavorable exchange rate.

Insiders pointed out that the Esprit that was once in vogue was on the decline. In addition to the impact of fast fashion brands and the reasons for the competition in network sales, there were also reasons for the company itself, including

Lack of innovation and so on.

"Esprit is getting ugly."

Ms. Wu can not help but sigh when she passes through Esprit stores.

Transformation year

The effect is not obvious.

In order to reverse the downward trend of performance, Si Jie global excavated Ma Haosi from ZARA's parent company Inditex group in September 2012 as chief executive, and launched a new 3 year pformation plan from 2014 to 2016, including saving HK $1 billion a year, reducing operating expenses to less than 50%.

For this reason, Si Jie global has closed its stores in the Chinese market on a large scale, and resorted to shortening the shelf time of products and so on.

"Now again

It is too late for ZARA to be in line. "

Some people have pointed out that the global pformation plan has been implemented for a year, but the effect is not obvious.

The bad news followed. HSBC's latest research report pointed out that the depreciation of the euro against the Hong Kong dollar was expected to lose 99 million Hong Kong dollars this year and the 2016 deficit further expanded to HK $116 million.

HSBC sharply reduced the investment rating of SST and lowered its target price from HK $17 to HK $9.3 to HK $45%.

Si Jie Global Holdings said that the performance in the second half of 2015 is still full of uncertainty because it will start implementing the new vertical mode, and it is expected that the sales performance will be more volatile, and most of the market environment is already very grim. If the euro continues to depreciate, it will affect the performance of the Hong Kong dollar.

In addition, the group will be vigilant in controlling costs and reducing expenses, and will continue to close some of the shops that are losing money.