ESPRIT HOLDINGS LIMITED H o n g K o n g E x c h a n g e s a n d C l e a r i n g L i m i t e d a n d T h e S t o c k E x c h a n g e o f H o n g K o n g L i m i t e d t a k e n o r e s p o n s i b i l i t y f o r t h e c o n t e n t s o f t h i s a n n o u n c e m e n t , m a k e n o r e p r e s e n t a t i o n a s t o i t s a c c u r a c y o r c o m p l e t e n e s s a n d e x p r e s s l y d i s c l a i m a n y l i a b i l i t y w h a t s o e v e r f o r a n y l o s s h o w s o e v e r a r i s i n g
f r o m o r i n r e l i a n c e u p o n t h e w h o l e o r a n y p a r t o f t h e c o n t e n t s o f t h i s a n n o u n c e m e n t .
ESPRIT HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 00330) UNAUDITED FY14/15 FIRST QUARTER UPDATE FOR THE T H R E E MONTHS ENDED 30 SEPTEMBER 2014 FIRST QUARTER UPDATEThe boar d of direct or s (t he "Boar d") of Es prit Holdings Limit ed (t he " Company ") presents the unaudited FY 14/15 first quarter update of the Company and its subsidiaries (t he "Gro up") for the three months ended 30 September 2014. This announcement is made pursuant to Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Law s of Hong Kong) and Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
Turnover by Product DivisionFor the 3 months ended 30 September
2014 2013 Change in %
% to Group
% to Group
Local
Product Divisions HK$ million Turnove r HK$ million TurnoverHK$ currency
^ For the three months ended 30 September 2014, denim sales have been re-grouped from others to women casual and men casual. In addition, sports sales have also been re-grouped from others to women casual. Comparative figures have been restated accordingly
* Others include shoes, accessories, bodywear, kids, licensing income and licensed products such as timewear, eyewear, jewelery, bed & bath, houseware etc.
- 1 -
Turnover by Key Distribution ChannelFor the 3 months ended 30 September
2014 2013 Turnover Change in %
% to Group
% to Group
Local
Ke y Distribution Cha nne ls HK$ million Turnove r HK$ million TurnoverHK$ currency
Retail # | 3,035 | 55.4% | 3,570 | 54.5% | -15.0% | -15.0% |
Germany | 1,441 | 26.3% | 1,728 | 26.4% | -16.6% | -16.3% |
Rest of Europe | 971 | 17.7% | 1,147 | 17.5% | -15.3% | -15.6% |
Asia Pacific | 623 | 11.4% | 695 | 10.6% | -10.4% | -10.5% |
Wholesale | 2,403 | 43.9% | 2,904 | 44.3% | -17.2% | -17.0% |
Germany | 1,151 | 21.0% | 1,287 | 19.6% | -10.5% | -10.2% |
Rest of Europe * | 1,169 | 21.4% | 1,405 | 21.5% | -16.8% | -16.6% |
Asia Pacific | 83 | 1.5% | 212 | 3.2% | -61.0% | -60.9% |
Total
# Retail sales include sales from e-shops in countries where available
* For the three months ended 30 September 2014, wholesale sales to Chile, Colombia and the Middle East have been re-grouped from Asia Pacific to Rest of Europe. Comparative figures have been restated accordingly
Retail Distribution Channel by Region (Directly Managed Retail Stores)
As at
Movement since
Movement since
As at
30 Septembe r 2014 1 Octobe r 2013 1 July 2014 30 Septembe r 2014
No. of
Net sales
Year-on-year net change in
Year-on-year change in net
Net change in no. of
Net change in net sales
No. of comp-
Comp-stores
Regions stores area (m2) no. of stores sales area stores area stores * sales grow th
Germany 154 123,869 (15) -4.5% (8) -1.9% 118 -13.5% Rest of Europe 185 100,964 (29) -6.1% (3) -1.8% 143 -12.6% Asia Pacific 545 99,035 (65) -8.5% (10) -2.0% 326 -2.5%
Total 884 323,868 (109) -6.3% (21) -1.9% 587 -11.6%
* All e-shops within Europe (i.e. Germany and Rest of Europe) and the e-shop in China are shown as 1 comparable store in
Germany and 1 comparable store in Asia Pacific respectively
- 2 -
Wholesale Distribution Channel by Region (Controlled Space Only)
As at
Movement since
Movement since
30 Se pte mbe r 2014 1 Octobe r 2013 1 July 2014
No. of
Net sales
Year-on-year net change in
Year-on-year change in net
Net change in no. of
Net change in net sales
stores a re a (m2)
no. of stores sa le s a re a stores a re a
* As at 30 September 2014, controlled wholesale points-of-sale and space in Chile, Colombia and the Middle East have been re-grouped from Asia Pacific to Rest of Europe. Comparative figures have been restated accordingly
Turnover by Geography For the 3 months ended 30 September% to Group
Local
Regions HK$ million Turnover HK$ million Turnover HK$ currency
Germany 2,596 47.4% 3,018 46.0% -14.0% -13.7% Rest of Europe # 2,143 39.1% 2,587 39.5% -17.2% -17.2% Asia Pacific 706 12.9% 909 13.9% -22.3% -22.4% North America 33 0.6% 38 0.6% -11.4% -11.4%
# For the three months ended 30 September 2014, wholesale sales to Chile, Colombia and the Middle East have been re-grouped from Asia Pacific to Rest of Europe. Comparative figures have been restated accordingly
- 3 -
H i g h l i g h t s f o r t h e t h r e e m o n t h s e n d e d 3 0 S e p t e m b e r 2 0 1 4 ( " 1 Q F Y 1 4 / 1 5 " )
The Group rep ort ed a t urnove r decline of -16. 3% in local currency during t he quart er ended 30 Sept embe r 2014 compa red t o t he same period in t he previous year. Sales perf orman ce in t he quart er was adve rsely aff ect ed by t he f ollowing f act ors:
Re duc tio n in to ta l c o ntro lled spa ce (retail and who le sale co mb ined )
As recent ly report ed in our FY13/ 14 annual r esult s, t ot al cont rolled space is being reduce d primarily due t o our st rat egic decision t o close unprof it able ret ail st ores and rat ionaliz e our wholesale cust omer base t o improve s pa ce produ ct ivit y . As a result of t hese measur es, which are nec es sary t o re - est ablish a healt hier p lat f orm f or t he channel s in t he f ut ure , we beg an t he new f inancial year FY14/ 15 wit h a more st reamlined dist ribut ion net work (a -6. 3%
year -on-yea r decline in Ret ail net sales area and a -14. 5% year -on -year
decline in Wholesale cont rolled space in 1Q FY14/ 15 ). Rest of Europe wholesale repo rt ed a relat ively higher dec line in cont rolled f ranchise st ore
space ( -21. 5% year -on-year) mainly due t o loss of business in Russia. I n Asia Pacif ic, t he -32. 3% year -on -year d ecline in t ot al cont rolled wholesale space was mainly t he result of t he space reduct ion in FY13/ 14 .
Un usu ally warm we ather in Eu rop e
The prolonged warm weat her condit ion s in most part s of Europe ha ve had a very signif icant impact in st ores t raff ic which result ed in much lower t han expect ed s ales of our Aut umn/ Wint er produ ct s f or t he quart er . T his sit uat ion was more evident in German y, our largest m arket , result ing in an overall year -
on-year indust ry sales decline (as report ed b y Text ilwirt schaf t -Test Club).
Spec ia l return ag ree me nts in Chin a
Large r et urn ag reeme nt s were neces sar y t o resolve ou r long t ime problems wit h aged invent ory in t he count ry's wholesale channel as repo rt ed in t he Group's FY13/ 14 a nnual result s disclosure s . I n 1Q FY14/ 15, t he corr espo nding ret ur n s have be en t he ke y reaso n behind t he wholesale t urnove r in Asia Pacif ic regist ering a highe r decline (-60. 9% in local curr ency ) t ha n t he co rre sponding y ear -on-year decline in cont rolled spac e ( -3 2. 3%). The special ret urn a greem ent s init iat ive was complet ed during t he quart er under revie w and will not have any f urt her impact on t he Group's perf orman ce in China f or t he rest of t he financial year .
Less me rch and ise av ailab le for s ales pro mo tio ns
As a result of our successf ul normalizat ion of invent ory levels , t here was less st ock available f or sales promot ions t his quart er as compar ed t o t he same period last year. Whilst f ewer merchandis e volumes f or sales promot ions place pres sure o n t urnover in t he short t er m, reducing t he previous invent or y levels was a must t o improve ou r working ca pit al and t o build a healt hier sales mix over t ime which includes a great er p ropo rt ion of f ull price ret ail sales.
Not wit hst anding t he negat ive sales perf orm ance in t he f irst quarter of FY14/ 15 , we cont inue t o make go od prog res s in all aspect s of t he Transf or mat ion phase , and part icularly in t he f ollowing areas:
- 4 -
Positive in itia l res po nse to th e n e w vertic al bus ine ss mode lThe implement at ion of t he new vert ical business model , which requ ires us t o chang e t he way we work across t he whole organizat ion as well as wit h our wholesale part ner s, has had no visible negat ive impact on order s, as evident in t he most recent t wo rounds of orde ring proce sses c omplet ed since July 2014 . More import ant ly, t here has not be en an y loss of wholesale part ners as a res ult of t his change . I n f act we are already r ecei ving posit ive f eedback and respo nses f ro m our wholesale part ner s on t he new season al calendar a nd prod uct s dev elope d under t he n ew business model . Thes e are our n ew spring/ summer collect ions , which will arrive at st ores f rom aroun d Ja nuary 20 15 onwar ds.
Positive in itia l impa c t o f o ur l e an sup ply c hain man age m ent
We remain f ocus ed o n enhan cing ou r supp ly chain management in t erms of speed and eff iciency, and are beginning t o see t he posit ive impact on sourcing cost s . The ant icipat ed savings ar e st art ing t o mat erialize and will optimize over t ime. As and when savings ar e ach ieved , t hese will be reinvest ed into improving produ ct qualit y and prici ng as well as cont ribut ing t o improv ement s in prof it abilit y .
We remain conf ident t hat we will succes sf ully complet e t his financial year t he int roduct ion of t he new vert ical business model t hat will enable t he t urnaround of Esprit and will est ablish a st rong f oundat ion for t he Company's f ut ure growt h.
B y O r d e r o f t h e B o a r d F l o r e n c e N g W a i Y i n C o m p a n y S e c r e t a r y
Hong Kong, 30 October 2014
As at the date of this announcement, the Board comprises (i) Mr Jose Manuel Martínez Gutiérrez (Group Chief Executive Officer) and Mr Thomas Tang Wing Yung (Group Chief Financial Officer) as Executive Directors; (ii) Mr Jürgen Alfred Rudolf Friedrich as Non-executive Director; and (iii) Mr Raymond Or Ching Fai (Chairman), Mr Paul Cheng Ming Fun (Deputy Chairma n), Mr Alexander Reid Hamilton, Mr Carmelo Lee Ka Sze and Mr Norbert Adolf P latt as Independent Non-executive Directors.
- 5 -
|
distributed by
|
