Reuters: Global Markets: Esprit shares up as sales improve, divestment plan completed

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Esprit shares up as sales improve, divestment plan completed May 10th 2012, 04:52 HONG KONG | Thu May 10, 2012 12:52am EDT HONG KONG (Reuters) - Shares of Esprit Holdings Ltd (0330.HK), the biggest Hong Kong-listed clothing retailer, rose to the highest in about a week after quarterly store sales improved and the company booked a write-back from divesting its North American retail operations. The Europe-focused clothing retailer climbed to HK$15.20, the highest since May 4. The stock was up 6.6 percent at HK$14.94 as of the midday break, outpacing a 0.93 percent decline in the benchmark index .HSI. The company's retail store sales improved in the third quarter ended March, expanding 0.5 percent year-on-year, thanks to growth in Europe, according to Bank of America Merrill Lynch. Sales declined in the fiscal first half. Esprit competes with Swedish clothing retailer Hennes & Mauritz AB (HMb.ST) and Spain's Inditex SA (ITX.MC) in Europe. The Hong Kong-based retailer shut all its stores in North America as of the end of March, resulting in a net write-back of HK$700 million ($90.17 million) due to favourable settlements with landlords and employees, the fashion group said late Wednesday. Esprit, which admitted last year that its brand had "lost its soul," in April hired Thomas Tang, former chief financial officer of blue chip developer Sino Land Co Ltd (0083.HK), as group chief financial officer. "We continue to believe it is too early to get positive on Esprit, with its transformation plan still at an early stage," Alice Hui, an analyst at DBS Group Research, wrote in a note. Analysts said a weaker euro will also have a negative impact on earnings in the second half. ($1 = 7.7635 Hong Kong dollars) (Reporting by Donny Kwok; Editing by Ryan Woo) Link this Share this Digg this Email Reprints

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