Asia Pacific revenue fell 17.5 per cent year on year for Esprit Holdings for its fiscal year to the end of June, offset by a 43 per cent e-commerce boost.
The drop was 18.8 per cent in the first half, easing to 16 per cent.
Esprit says it faces “certain difficulties” in APAC that differ from its challenges in Europe.
Firstly, in China, its largest market, retail space is concentrated both in POS in department stores that are attracting less traffic, and in off-price outlets that are usually brand dilutive.
“To this end, we are implementing an aggressive restructuring of our network in China, and have made good progress,” says the company, which closed 29.7 per cent of controlled space (retail and wholesale combined) during the year. “Moreover, a new concept has been developed to adapt to the small spaces in these POS.”
With specific product requirements in APAC, the company is complementing its global collections with a dedicated product line for the region.
Esprit says the reduction in sales area is in line with its plan to accelerate a restructuring of the store network. With APAC lease terms fortunately generally short, the leases of most of the heavy loss-making stores will expire in the next two financial years.
Meanwhile, e-shop APAC reached HK$221 million (US$28 million) revenue for the year, an increase of 43.1 per cent. This was fuelled by actions such as the integration of the Esprit Friends loyalty program into the e-shop, the strengthening of its business with Tmall, the expansion of its online presence in China through such platforms such as WeChat and Weibo, and collaborations with celebrities and key opinion leaders through social media.