* Says expected loss due to surprisingly weak operating
* Company will continue to focus on revitalising brand
* Shares down 27 pct so far this year
(Adds quote, share price, background)
HONG KONG, Dec 18 Europe-focused retailer Esprit
Holdings Ltd warned on Tuesday it may post a loss for
the six months ended December due to worse-than-expected
operating results, as it grapples with weakening demand in the
euro zone and faces an uphill battle to revive its brand.
The company, which competes with Swedish clothing retailer
Hennes & Mauritz AB and Spain's Inditex,
said it would continue to focus its efforts on rebuilding the
brand, improving the quality of its products and enhancing its
supply chain network.
"The board believes that these actions will help the group
in capturing opportunities for further business growth when the
market recovers," it said in a statement to the Hong Kong stock
The warning comes after Esprit in September missed earnings
forecasts and said a slowing Chinese economy and lingering euro
zone problems continued to pose risks to its business.
Shares of the company, which has a market value of $3
billion, jumped more than 30 percent in November when it said
one of its founders had doubled his stake in the ailing retailer
to become its second-largest shareholder.
The stock has still dropped 27 percent so far this year,
lagging a more than 20 percent rise in the benchmark Hang Seng
Esprit, which was born out of a clothing sale from the back
of a station wagon in San Francisco more than 40 years ago, is
in the midst of a $2.3 billion restructuring that has been
overshadowed by a management reshuffle.
In August, it hired Jose Manuel Martínez Gutiérrez, an
executive from larger rival Inditex, as its new chief executive
after the sudden resignations of its top two officials in June.
Martínez managed Inditex's distribution and global retail
network and helped overhaul the Spanish company's supply chain
Esprit, once known as "the bluest of blue chips in Hong
Kong", contrasts sharply with Inditex, which has defied a
slowdown in Europe and said earlier this month it plans to keep
up the pace of expansion in China.
(Reporting by Anne Marie Roantree; Editing by Muralikumar