Esprit dives back into the red

Hong-Kong-listed fashion brand Esprit has reported another "very difficult [year] for the group" after recording a loss of £68.5 million (HK$664 million), compared to a profit of £39.3 million (HK$381 million) the year prior.
For the year ending 31 December 2022, the group recorded a total revenue of £728 million (HK$7,063 million) compared to the total revenue of £857 million (HK$8,316 million) the year prior, revealing a 15% drop.

The company, which is headquartered in Hong Kong and Germany, puts its significant financial losses down to high inflation, high energy prices stemming from Germany’s over-reliance on natural gas from Russia, the cost-of-living crisis and the conflict between Ukraine and Russia.

For the year, the gross profit margin was 40.7%, which was 7.9% down year-on-year. Gross profit stood at £296.7 million (HK$2,878 million) as compared to £416.7 million (HK$4,042 million) the year prior.

The 1968-founded brand’s revenue is divided into four main channels. These include wholesale, ecommerce, owned retail stores and licensing.

Wholesale revenue experienced a drop of 8% to £272 million (HK$2,639 million). Ecommerce revenues declined by 29% to £263.7 million (HK$2,558 million). Retail revenue stood at £179.9 million (HK$1,745 million), which remained consistent with 2021’s retail revenue of £178.4 million (HK$1,730 million).

Licensing revenue recorded a growth of 8% year-on-year. The growth was mainly driven by a strong performance of the european shoe business, and the royalty income contributed by eyewear, watches, and jewellery category.

This follows the news that Esprit appointed Ana Andjelic as Chief Brand Officer to "redefine the brand’s new identity" and lead the creative direction and design hub globally from New York, in November 2022.