Esprit 2024 financial results: Focus shifts to licensing after losses

Clothing retailer Esprit Holdings Ltd. released its final results for the 2024 financial year on Monday evening, after a considerable delay. The figures were affected by the ongoing insolvency proceedings of almost all international subsidiaries and the resulting one-off effects. As part of the restructuring efforts and a shift in the business model to licensing partnerships, the company has now given up most of its retail and wholesale business and sold the brand rights for the European market.

Traditional business decline

According to the current annual report, consolidated revenue from continuing operations – excluding the shares of temporarily deconsolidated subsidiaries as part of the ongoing restructuring proceedings – amounted to 42 million Hong Kong dollars in 2024. This represents a decrease of 16 percent compared to the previous year. According to the company, this revenue was primarily derived from licensing income. Total revenue from the insolvent companies, which was not included in the consolidated financial statements, fell by 73.5 percent to 1.55 billion Hong Kong dollars.

The operating loss from continuing operations increased from 181 to 288 million Hong Kong dollars. The net loss from these business segments rose by 34.7 percent to 287 million Hong Kong dollars.

Due to positive one-off effects from the deconsolidation, the net loss of the insolvent subsidiaries decreased by 55.8 percent to 940 million Hong Kong dollars. This reduced the reported net loss attributable to shareholders, which had been 2.34 billion Hong Kong dollars in the previous year, by 47.5 percent to 1.23 billion Hong Kong dollars.

Esprit continues to focus on licensing model

Although the company has now almost completely discontinued its traditional business activities, it continues to focus on the Esprit brand's future. The group confirmed that the label's "global presence" will be secured in the future through licensing partnerships for various market regions.

Esprit has already relinquished the brand rights for Europe, its formerly most important market by far. As the company announced in its current annual report, these rights, along with the footwear licensing rights for the US market, were acquired last autumn by Fasbra SE. Fasbra SE is a subsidiary of the German footwear retailer Deichmann SE. Under the agreement, the group will now receive 25 percent of the net profit generated by Fasbra with Esprit clothing in Europe for a period of ten years. However, it remains to be seen how a relaunch of the label in Europe could be specifically realised.