Esprit'S Situation In The Chinese Market Is Still Not Optimistic.

The parent company announced the latest annual report from 2015 to 2016.

In the ~2016 fiscal year 2015, its revenue was HK $17 billion 700 million, down 8.4% (down 1.1% at a constant exchange rate).

Its net profit in the fiscal year was 2100 million, compared with a loss of 3 billion 696 million yuan in the same period last year.

Profit is mainly due to changes in sales and tax system (tax refund).

They sold the Hongkong office for 731 million Hong Kong dollars.

Excluding this effect, the pre tax loss is 5.8 billion, or much better than the pre tax loss 3 billion 667 million.

Esprit has some signs of recovery.

Excluding online businesses, the overall same store sales increased by 4.3%, mainly driven by the same store sales growth in Europe, and the same store sales in the Asia Pacific region dropped by 4.1%.

In addition, closing the loss shop is also helpful. In the earnings report, it mentioned that it has achieved the first growth in 9 years (the turnover per unit area).

Judging from the category, Esprit

Some of the revenues rose by 1.7% at a constant exchange rate, but EDC (income decline slowed down) and Esprit Mens men's income continued to decline.

The improvement of Esprit business mainly benefits from the "vertical mode", that is, "faster and more cost effective development and supply chain processes, greatly improving products."

And cost performance.

This may have something to do with the 2014 Zara top Jose Manuel Martinez Gutierrez's entry into Esprit and its reform.

However, Esprit's situation in China is still not optimistic.

Sales in the Chinese market fell by 18% last year.

In addition to global economic fluctuations and China's economic slowdown, they believe that one of the problems is the channel: the Esprit business in China is lagging behind, and consumers are less keen on Esprit in department stores.

At present, the Asia Pacific market electricity business accounts for only 6.1% of the total revenue of the region, far behind the overall electricity business of the group accounting for 23.3% of the total.

Deng Yongyong, chief financial officer of Si Jie global, mentioned at the analyst conference that Esprit's measures to deal with the challenges of Asia Pacific include the development of franchising and the development of e-commerce business.

In addition, Esprit has to save HK $1 billion in the next two years. Specific measures include continuing to reduce poorly managed shops, reduce wholesale size and reduce structural overlap.

But even if these technical problems are solved, Esprit may have to reexamine its product design and "younger".