Recovering apparel retailer Esprit has increased its gross margin by 7 per cent during the past six months on the way to its first profit in five years.
Sales rose to US$1.06 billion with a profit attributable to shareholders of $48.7 million, compared with a loss during the previous corresponding period of $52.9 million. The company’s gross margin reached 48.6 per cent.
In a statement, the company said the turnaround was also due to new infrastructure and strategies adopted by the new management team, cost-control measures, improved inventory management, and growth in online sales. Selected strategic functions were relocated from Germany to Hong Kong, where the company is listed and its senior management team is now based.
“Combining expertise from the two offices has created a stronger organisational balance and workplace synergy,” said William Pak, executive director, CEO and COO.
“We will continue to strengthen Esprit by becoming a truly omnipresent brand and enhancing our product portfolio that fits with the company’s mission of making our customers ‘feel good to look good’,” he said.
The improved performance was achieved despite revenue lost due to Covid-related lockdowns in Esprit’s major European markets during the first quarter of last year and restrictions on store entry in the fourth quarter. This was balanced by selling more stock at full price and less discounted.
Despite the impact of Covid, the company is upbeat about its prospects moving forward.
“Although there are major uncertainties in the short term for the general global economy, the group will stay connected and remain agile to react promptly to whatever challenges that may emerge,” said Christin Chiui, chairperson and executive director.
“The company has already started revitalising the Esprit brand and leveraging the company’s 2021 performance to drive greater sustainable business growth in 2022.”