Clothing retailer Esprit reports first-half loss

Clothing retailer Esprit Holdings Ltd posted a loss in the first half, hurt by a slowdown in China and a weak euro.

Esprit reported a net loss of HK$238 million ($30.7 million) for the six months ended in December, compared with a profit of HK$47 million a year earlier. Turnover fell to HK$9.3 billion from HK$10.7 billion.

Esprit has been in the midst of an ambitious revamp over the past year that has included store closures, price adjustments, new return policies, and technology and distribution improvements.

"Looking ahead into 2H FY15/16, we remain confident that we are heading in the right direction and are laying the necessary foundation to restore competitiveness and long term growth for Esprit," the company said in its earnings report.

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Turnover at Esprit's largest market, Germany, grew 1.5 percent year on year in local currency terms. Retail turnover grew 8.6 percent, while wholesale turnover declined 9.6 percent.

Gross profit margin remained unchanged at 50.5 percent.

"The weakness in the Euro, if persists, will put some pressure on the group's gross profit margin," the company said.

Esprit, which earns the bulk of its revenues in Europe, said the operating environment appeared challenging amid volatile financial markets and economic uncertainty that might dampen consumer sentiment.

Shares in Esprit closed up 2.9 percent on Tuesday, outpacing a 0.3 percent fall in the overall market .HSI.

$1 = 7.7663 Hong Kong dollars