Imitation Fast Fashion Zara Failed Esprit Second Early Warning Loss Last Year Or 2 Billion 200 Million

Difficulties and poor management make it difficult for Esprit to turn over.

Esprit's parent company 0330.HK announced yesterday afternoon that its operating losses in the fiscal year ended June 30, 2018 were expected to be HK $2 billion 250 million and net profit of HK $67 million in the last fiscal year.

Due to a decrease in the volume of retail outlets, the Group expects revenue decline to continue to be in fiscal year 2019 and fiscal year 2020, thus reducing revenue forecasts for fiscal year 2018-2020 to 1.6%, 2.9% and 3.7% respectively.

It is worth noting that this is the second time that Esprit issued a profit warning after the launch of Esprit in June.

Prior to the operation, Si said that the expected loss was mainly due to the non regular provision and impairment of the fair value of the assets of the management group, as well as the expected operating losses of the underlying business.

Sales fell sharply.

Earlier this year,

Clean up executives from Zara.

In March, Jose Manuel Mart Nez Nez Guti rrez rrez was outgoing as executive director and CEO of the group, and was replaced by Anders Kristiansen in June 1st.

In August 2012, Si Jie joined Zara, the manager of the rival "emperor" class with a sky high salary of HK $40 million 350 thousand, which was a 38.4% jump in stock prices.

In April, Rafael Pastor Espuch was the product president of the outgoing group.

Since November 2013, Pastor has been the chief product officer of Esprit. He had previously worked as an executive in women's clothing department in Zara.

Data show that in the first half of December 31st, group performance continued to slump, sales fell 3.4% to HK $8 billion 39 million, net loss amounted to HK $954 million.

In the face of the surging tide of fashion, Esprit decided to learn from the fastest growing Zara while sales were about to fall below HK $30 billion, while inviting Brazil.

Tegisele Bundchen endorsed the brand.

However, because of the fundamental difference between Esprit and Zara, Esprit has to accept the fact that Zara fails.

Some analysts believe that although both Zara and Esprit are

Brand, but the essential difference between the two is that Zara relies on a heavy asset company, and 50% of its products come from its own factories and has absolute initiative in product sourcing.

On the contrary, Esprit is a standard light asset company. Its lengthy supply chain and huge inventory become a major obstacle to brand change.

"Those executives are in the distant German command of the Chinese market, and designers are sitting in the office building in Hongkong lazily drinking coffee without knowing anything about the rapid change of the outside world," said an executive who was in charge of Esprit's business in China.

In May of this year, Si Jie world was withdrawing from the Australian and New Zealand markets and closed 67 stores in two places. It is estimated that the cost of closing the store is HK $200 million (US $25 million 600 thousand), which will make the clothing company focus on important Asian markets such as mainland China, Hongkong, Taiwan and Singapore. The company also gave up its flagship store in Hongkong business district Tongluowan.

Aware of the problem, Si Jie universal said that youth has become the most important strategic objective of the brand at present, the aim is to attract more new consumers.

Ke Qinghui, executive director of group executive director, emphasized earlier that the board of directors is confident that Anders Kristiansen will lead Esprit into the next growth stage, and that the innovative Espirit will become a brand with reference value for the new generation of consumers.

What is more significant is that Zara, seen as the benchmark of the industry, is also beginning to see changes and new demands for young consumers.

The rise of the electricity supplier began to close the store and shift its focus to online pfer.

According to the data, in the 2017 fiscal year ending January 31st, Inditex Group sales increased by 9% to 25 billion 340 million euros, leaving the two digit growth, a further slowdown than the 12% increase in the previous fiscal year.

In the first quarter of April 30th, the group's sales growth slowed to 2% again, 5 billion 654 million euros, gross margin 58.9%, and net profit increased 2.23% to 669 million euros compared to the same period last year.

As the golden age of fast fashion is over, the challenges that Esprit will face or will go beyond expectations.

After the news, 0330.HK fell 0.5% today to HK $1.98 per share, and its stock price has fallen more than 50% since this year, and its market value is now HK $3 billion 600 million.