A widely-expected weakening in global consumption this year may create opportunities for fashion retailer Esprit Holdings to rake in market shares or even acquire rivals, the company said yesterday.
But only firms with a good brand can be the target of the world's fifth-largest fashion chain.
“We will not buy a cheaper brand than Esprit. That's not our culture. It should at least be above Esprit's positioning,” said Heinz Krogner, chairman of the company.
“We target good brands with poor performance,” said John Poon, deputy chairman and group CFO. “We hope to replicate another Esprit story.”
There have been a lot of brands changing hands and going into private equity which drove up valuation in the past 18 months, Poon said. The gradual exit of the private equity because of the ongoing credit crunch is likely to create opportunities and valuation may come down.
Poon said the firm has been talking to various parties from private equity, investment banks to brand-owners, but nothing has been finalized.
The firm said so after it posted a 37 percent jump in its first-half fiscal year earnings yesterday. It also came as most people believe the global retail market could hit a cold front this year, as the slowdown in the US economy would dampen consumption globally.
Esprit posted a net profit of HK$3.3 billion (US$423 million) in the six months ended in December, achieving a 37 percent year-on-year growth. Turnover jumped 27 percent to HK$18.5 billion.
Despite the slowdown in global economy, the European-focused company maintained its target of double digit growth for the full year 2008. “We are confident that we can maintain our double digit growth this year,” said Krogner, noting that the company will continue to fight for a raise in market shares. “Bad times are good for strong retailers.”
Esprit’s rival Inditex, parent company of Zara and H&M, has posted a slowdown in sales growth in recent months. Britain's top clothing retailer, Marks and Spencer, reported a 2.2 percent fall in like-for-like sales over Christmas, sending its shares south.
The company said it will continue to expand on the Chinese mainland.
The company runs a joint venture with China Resources Enterprise Ltd on the mainland.
Poon said that Esprit is interested in buying out China Resources’stake in their venture. China Resources has been selling non-core businesses to focus on beer and supermarket. “We’re ready, able and willing to take it back.” he said. For Hong Kong, Poon said that the company will look to increase its flagship stores in prime locations but having difficulty in finding suitable sites as rents jump.
Esprit will spend about HK$1 billion in the second half to open 60 retail stores and add 500 wholesale outlets around the world.
But only firms with a good brand can be the target of the world's fifth-largest fashion chain.
“We will not buy a cheaper brand than Esprit. That's not our culture. It should at least be above Esprit's positioning,” said Heinz Krogner, chairman of the company.
“We target good brands with poor performance,” said John Poon, deputy chairman and group CFO. “We hope to replicate another Esprit story.”
There have been a lot of brands changing hands and going into private equity which drove up valuation in the past 18 months, Poon said. The gradual exit of the private equity because of the ongoing credit crunch is likely to create opportunities and valuation may come down.
Poon said the firm has been talking to various parties from private equity, investment banks to brand-owners, but nothing has been finalized.
The firm said so after it posted a 37 percent jump in its first-half fiscal year earnings yesterday. It also came as most people believe the global retail market could hit a cold front this year, as the slowdown in the US economy would dampen consumption globally.
Esprit posted a net profit of HK$3.3 billion (US$423 million) in the six months ended in December, achieving a 37 percent year-on-year growth. Turnover jumped 27 percent to HK$18.5 billion.
Despite the slowdown in global economy, the European-focused company maintained its target of double digit growth for the full year 2008. “We are confident that we can maintain our double digit growth this year,” said Krogner, noting that the company will continue to fight for a raise in market shares. “Bad times are good for strong retailers.”
Esprit’s rival Inditex, parent company of Zara and H&M, has posted a slowdown in sales growth in recent months. Britain's top clothing retailer, Marks and Spencer, reported a 2.2 percent fall in like-for-like sales over Christmas, sending its shares south.
The company said it will continue to expand on the Chinese mainland.
The company runs a joint venture with China Resources Enterprise Ltd on the mainland.
Poon said that Esprit is interested in buying out China Resources’stake in their venture. China Resources has been selling non-core businesses to focus on beer and supermarket. “We’re ready, able and willing to take it back.” he said. For Hong Kong, Poon said that the company will look to increase its flagship stores in prime locations but having difficulty in finding suitable sites as rents jump.
Esprit will spend about HK$1 billion in the second half to open 60 retail stores and add 500 wholesale outlets around the world.
