Esprit Net Profit Plunged 50.5%

It is hard to say how the future Esprit will go and when it will reshape its former glory.

Revenue plunged 16.3%, net profit plunged 50.5%, which is the first half of the financial year 2014/2015's report card, and also the biggest decline after 2011 net profit fell 98%.

The performance in the mainland also failed. The same period reported data showed that the mainland's turnover in the first half of the fiscal year was HK $765 million, down by 22.3% (calculated according to the Hong Kong dollar), which exceeded the overall decline of 18.1% in the Asia Pacific region including Australia, New Zealand, Hongkong, China, Taiwan, China, Macao, Malaysia and Singapore.

The decrease in retail sales is mainly due to a decline in store traffic and weak sales promotion in department stores. Indeed, the decline of data also has the role of Esprit in the minds of consumers, which directly affects the performance of the former.

Mr. Wang used to be a loyal fan of Esprit. With Esprit moving from glory to decline, he sighed with emotion. "When I was 2001 years old, I went to college. At that time, I could save a few months' living expenses to buy a Esprit dress. I was very proud of it, and the quality and design were all right." He said to the new financial reporter. To his memory, Esprit did not offer discounts several times throughout the year. "Unlike now, there are often discounts and sometimes very low discounts." This made him unacceptable mentally.

In the past four or five years, Mr. Wang has rarely patronized Esprit. "It has many styles that can be made by fast fashion brands, even more popular than it is. Its price is higher than that of fast fashion, and it fades out of sight without knowing it."

Li Ming, who is familiar with the Espirt industry (pseudonym), introduces to the new financial reporter that in 1992, Esprit entered the mainland. "In fact, it started with some research and preliminary layout. The real effort should start from around 1996, and this process has developed better than 2006, and then began to go downhill."

In recent years, the booming shops have been closed. Public information shows that in August 2012, the Esprit flagship store in CITIC Pacific square in Shanghai quietly closed. In July 2013, the Esprit store in Taigu, Beijing, occupied the gold position in July 2013. In 2014, it was stationed in Guangzhou for 7 years, and was also the first Esprit flagship store in Guangzhou to close.

"At first, the news of the flagship store was somewhat surprised, but later it became a wonder. It kept adjusting, but the final result was not very good." Li Ming said.

Zhu Qinghua, a light industry researcher at CIC, also said that Esprit is developing in China. strategy There have been many adjustments, initially positioned at the age of about 25 of the middle and high-end consumers, because the concept of domestic brand has been initially formed and has few choices, its rapid development with the affiliate mode.

"After the rapid growth of foreign clothing brands and local brands, the industry is fiercely competitive, and Esprit has not followed the market changes. Before that, the development trend began to decline. In 2002, its expanding consumer group was 20-40 years old and split into three sub brands to seize the market. However, the disparities between brands led to confusion in brand positioning; in 2012, it began to locate fast fashion for development." He summed up the new financial reporter.

In addition to its direct management of retail business, Esprit Wholesale business in China is also not optimistic. According to its earnings report, according to the guidance of the annual financial report of 2013/2014, "the total controllable area of the group is decreasing, mainly because we have made strategic decisions to close the unprofitable retail outlets and rectify our wholesale customers to improve the sales area efficiency and to re establish a healthier platform for future distribution."

In this regard, Li Ming To be honest, Esprit relied on wholesale customers (agents) in the early years to expand its brand influence. Later, as the environment changes, many brands reduce their prices. "But the price is somewhat against the trend." In this case, the price of Esprit does not have the advantage, and it will have differences with wholesalers.

"Because there is a risk sharing between the brand dealers and agents, the price is high and the agents can not sell it will lose money; if agents are not allowed to sell at a low price, they will not act as a brand at large, they will discount the previous goods." Li Ming explained. "To a certain extent, this will also have an impact on the brand, which is one of the reasons for Esprit's reorganization of franchisees."

Product design, positioning, and franchisee relations have encountered problems, "joint action led to the decline of Esprit."