A number of operational changes brought on by Esprit CEO Jose Manuel Martinez Gutierrez helped Esprit to stabilize its business. The Hong Kong-based fashion company reported a net profit of $27.09 million in the year ended June 30, a turnaround from its $567 million loss the previous year.
Since joining Esprit from Spain’s Inditex in 2012, Martinez has taken the company out of the North American market, refreshed its merchandising mix and cut its inventory levels in order to prioritize its business in Europe and Asia.
“We are pleased with the encouraging results and good progress achieved over the past twelve months, and believe that we have turned a corner in our road to recovery,” Martinez said. “We stabilized the business and returned to profitability, and in so doing, have established a solid foundation from which to carry out our transformation, which is moving forward as planned.”
However, Martinez noted that the next year could be the company’s most challenging. Its top line is expected to decline next year when it closes more stores and wholesale facilities. In July 2014, the company implemented a new vertically integrated business model for its retail and wholesale channels, which it plans to finalize in the new financial year. Other planned changes include an overhaul of Esprit’s e-commerce and more consumer-oriented marketing efforts.