Hong Kong-based fashion retailer Esprit is seeing a fresh hopes for growth and revival again fuelling a 25 per cent growth in its share price last week.

Esprit, which recently announced the closure of all of its US stores, reported a drop in net profit of 74 per cent to HK$555 million (US$71.5 million) for the six months to December. Most of the losses were attributed to wholesale distribution channels rationalisations, warmer winter and softened demand in Europe.

But while breaking the bad news to investors, the company conducted a transformation plan to cope with the losses. It has recruited Brazilian fashion model Gisele Bundchen as the brand’s new face, established a denim division and design centre in China and launched a new retail concept.

“Going to the second half of the financial year, we will continue the rigorous and systematic implementation of our transformation plan in a continued challenging business environment,” Esprit said.

CEO Ronald van der Vis said that the company’s transformation plan is now gaining positive result.

“We were able to hold our ground in a challenging market environment and are altogether very well on track,” van der Vis said.

Also part of the transformation plan, Esprit will renovate 14 stores implementing a new retail concept yet to be revealed in detail.

And the first Asia-Pacific e-shop will soon open in China, a prelude to a broader regional online retail initiative.

“We’re on a long-term path. The full scale of success will become visible step by step,” said van der Vis.

GB