Esprit expects to break even thanks to exceptional gains

Esprit Holdings Ltd said on Monday that it expected a break-even in net income for the year ended in June thanks to HK$1.34 billion ($173 million) in exceptional gains from the sale of its Hong Kong office and a write-back in tax provisions.

The exceptional gains, including HK$725 million from the office sale, are set to offset non-recurring expenses due to cost restructuring measures that have included staff reduction and closure of some unprofitable stores in Hong Kong, Macau and China, the apparel retailer said in a filing to the Hong Kong bourse.

Esprit is due to release its FY15/16 results in September.

The Europe-focused retailer has been in the midst of an ambitious revamp over the past year that has included store closures, price adjustments, new return policies, and technology and distribution improvements.

In February, it posted a HK$238 million first-half net loss, hurt by a slowdown in China and a weak euro.

Last month, Esprit said Britain's vote to leave the European Union could affect consumer sentiment in its key markets in Europe. ($1 = 7.7543 Hong Kong dollars)