Esprit has posted a net loss for the year to June.

The Hong Kong-based fashion company reported an annual loss of HK$4.39 billion ($566.1 million) due to a decline in business performance, divestment of North American operations and the closure of loss-making stores.

A China goodwill impairment of HK$2 billion also contributed.

Sales were down 14 per cent, the company said.

Esprit says it will now focus on returning the company to profitability through cost reduction, normalising inventory levels and overhauling core operations.

The middle ground fashion brand has been trying to revive its image after “losing its soul” in 2011 and implementing a “transformation plan” that includes eliminating unprofitable businesses and operations.

New CEO Jose Manuel Martinez Gutierrez, a former Inditex manager, says the company has an ambitious course to regain Esprit’s competitiveness and is mindful of its immense potential.

The company has more than 1000 self-operated retail stores and over 9000 wholesale points of sale including franchise partners and sales space in department stores.