Esprit could raise euro prices as dollar stays strong
Esprit Holdings could raise its prices in Europe if the euro falls further while the US dollar stays strong, its CEO said this week.
Fresh from reporting a swing to profit in the latest half, despite lower revenue, Jose Manuel Martinez Gutierrez, said that “profit growth last year could have been stronger if it were not for the weakening euro.”
The company made a profit of HK$61m (almost US$8m) even though its sales dipped nearly 10% in the six month to December as it reined in its marketing spend in the face of tough market conditions.
The revenue dip also came after a period of consolidation that saw it closing some lossmaking stores in European markets.
Martinez Gutierrez said the return to profitability could signal the start of an expansion phase as the company mulls entering new markets and opening stories in strong locations.
But the weak euro remains an issue, especially as Germany is its largest market.
The South China Morning Post report the CEO saying the dollar had been expected to weaken after Donald Trump was elected US president. But with the opposite being the case, companies like Esprit that buy in dollars yet sell much of their offer in euros will have to look at pricing.
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