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* Seeks up to HK$5.25 billion to help finance restructuring
* Proposes one-for-two rights issue of new shares
* Stock priced at HK$8/shr, 36 pct discount to Monday close
* Turnover falls 22.8 pct yr/yr in three months to end-Sept
* CEO ready for slow turnaround, don't know where bottom is (Adds executive comments)
By Clare Baldwin and Alison Leung
HONG KONG, Oct 22 (Reuters) - Fashion retailer Esprit Holdings Ltd is tapping shareholders for up to HK$5.25 billion ($677 million) to help finance a long-planned multi-billion dollar restructuring.
Selling everything from bed sheets to jeans, Esprit has been trying to restructure its retail business as sales slow, especially in Europe where it generates three-quarters of its sales.
Esprit - which earlier this year hired a new chief executive from rival Inditex SA, parent of fashion chain Zara - last week posted lower-than-expected second-half earnings t h at sent its shares down as much as 8 percent on the day.
The company, which competes with the likes of U.S. group GAP Inc and Japan's Fast Retailing Co Ltd, is proposing a one-for-two rights issue of new shares to existing investors. It had said last year it would invest more than HK$18 billion in the restructuring.
Esprit said the issue would give it financial flexibility to rebuild its brand, overhaul its product range, refurbish stores, develop its supply chain, pay for expansion and for general working capital.
The new stock will be priced at HK$8 per share, a discount of about 36 percent to Monday's close, Hong Kong-listed Esprit said in a stock exchange filing. The issue will be the first from the company in 15 years.
"The initiatives we are addressing and the type of transformation plan we are addressing ... is going to take time," newly appointed CEO Jose Martinez said. "Most of the changes we are introducing into the company are challenging and demand a lot of resources."
The company also reported sales of HK$6.6 billion for the three months through September, down 22.8 percent. Excluding store closure programmes and North America, turnover declined 19.7 percent.
However, sales from stores open more than a year fell only 0.2 percent, against a fall of 8.5 percent a year ago, helped by a better performance in Europe.
Martinez warned of uncertainties around the performance of the company and the market. "I don't know where the bottom is," he said. "I would say we have to be ready for a slow turnaround of the company."
$1 = 7.7502 Hong Kong dollars Editing by Mark Potter and David Holmes