Final results announcement for the year ended 30 June 2011 / Esprit to invest over HK$18 billion in its brand over the next four years

HONG KONG (ots) -

- Transformation plan 2014/15 to give the brand back its shine and
recover its profitability
- Significant investments in stores, product design and brand
communication
- Group turnover grew 0.5% year-on-year in local currency to
HK$33.8 billion
- Retail turnover grew 6.2% year-on-year in local currency
- Total retail space increased 5.3% year-on-year off pro-forma
retail store base
- China growth and profitability accelerating in line with 5-year
plan
- Divesting structurally loss-making stores as well as North
America
- Operating result impacted by one-off restructuring costs related to
store network
- Net profit of HK$79 million or HK$2,352 million excluding
exceptional events

Esprit is to strengthen its brand with a comprehensive investment
program over the coming four years. The Board of Directors has
approved a transformation plan to re-establish Esprit as an inspiring
fashion brand with a clear identity and sustainable profitability.
The company, which is listed on the Hong Kong Stock Exchange, has set
the course accordingly. The investments in stores, product design and
brand communication are intended to revive customers' awareness of
Esprit as an inspiring fashion brand, based on the unique values and
heritage of the company.

The company will focus on the most attractive markets with
profitable growth in the future and withdraw from unprofitable
locations and markets. Esprit plans to invest a total of over HK$18
billion into the future of the company until 2014/15, thereof HK$7
billion to be spent on long-term investments (CAPEX) and HK$11.5
billion on business operations (OPEX).

Mr. Ronald Van Der Vis, Group CEO of Esprit said: "In essence
Esprit is a strong and profitable brand, but the brand has gradually
lost its soul over the past few years. The heritage of the brand has
been neglected and the company lost its customer focus. In 2010 we
started addressing this with the launch of the Six Strategic
Initiatives. After having defined the new brand direction and having
started the first steps with encouraging results, we now step-up our
efforts. We are taking bold and decisive steps to rebuild the brand
emotionally, inspired by our Californian heritage. Going forward
Esprit will again be a brand with both a clear identity and a strong
personality, returning the company to a high level of sustainable
profitability. We will align all our business activities with the
needs and expectations of our customers. Everything we'll do will be
focused on the Esprit woman, who embraces fashion and style in a
confident, relaxed way, caring about her looks as well as the ones
around her. She wants Esprit back: a responsible brand that gives her
fashion and quality to last. To her that is more relevant than ever
before."

To reshape and build a tangible, unique brand profile across all
channels and regions, Esprit invests an additional HK$1.7 billion
annually (in total HK$6.8 billion over four years) in brand
communication.

The collections will be given a much more distinct and fashionable
profile. To drive this forward the product divisions will be
reorganised. All divisions will be regrouped around Women's and Men's
with apparel centred around Knits and Wovens. Esprit will step- up
its design capabilities by establishing a Trend division in the
fashion capital Paris and a dedicated design hub in China for the
Chinese market. This way fashion trends can be implemented into the
collections more quickly. To capture the huge opportunities in denim,
a new Denim division will be established.

In order to concentrate on developing the best products, all
buying functions will be centralised within one sourcing
organisation. New sourcing offices will be opened to accelerate our
sourcing strategy. In doing so Esprit targets annual savings of
around HK$1 billion by FY14/15.

To upgrade the shopping experience for the customers in line with
the new brand direction, approximately HK$3 billion will be invested
until FY14/15 in the refurbishment of the entire retail full price
store network.

In line with its retail business Esprit will also concentrate its
efforts in the wholesale business. The company will invest in the
opening of more than 200 new franchise stores (excluding China) until
FY14/15 and is going to support wholesale partners with refurbishing
their space. Furthermore, expansion in high opportunity markets will
be driven forward. The total investment in wholesale is expected to
be approximately HK$3.9 billion.

Esprit's expansion in the future will be focused on the
opportunities for profitable growth. With this strategy, the company
is going to strengthen its European business in German-speaking DACH-
countries, Benelux and France. In Asia, Esprit will concentrate its
expansion in the growth markets of Taiwan, Singapore, Malaysia and -
above all - China. In China, turnover is expected to double over the
next four years to around HK$6 billion, with the store network
increasing from approximately 1,000 to 1,900 POS. In addition to the
expansion in China, Esprit plans to open a total of 185 new full
price retail stores until FY14/15. As part of this transformation
process and focusing its activities, Esprit is going to divest the
loss-making North American operations. In addition, 80 unprofitable
stores will be closed, which includes the exits of the retail
operations in Spain, Denmark and Sweden. The costs related to these
exceptional events have impacted the results of the FY10/11.

Mr. Ronald Van Der Vis further commented: "We are determined to do
what is right medium as well as long-term for the brand, our
customers and ultimately our shareholders. These measures need to be
taken to recharge the profit potential of Esprit and to re-establish
Esprit again as an inspiring fashion brand. With this we will bring
Esprit back on track. The results of our work will gradually become
visible over time, but the full transformation process will take
until FY14/15 to complete. Especially in the next 24 months our
financial results will be impacted by the measures and investments
required to transform our business."

Esprit Final Results For Year Ended 30 June 2011

The Group's turnover grew by 0.5% in local currency over FY09/10
from HK$33,734 million to HK$33,767 million. In retail, sales
increased by 6.2% to HK$19,059 million, and was thus able to
compensate for a drop of 6.0% in wholesale to HK$14,475 million. The
share of retail sales increased from 53.0% in the previous year to
56.4% in the FY10/11.

Despite the continued difficult economic climate in Europe, the
comparable growth rate in retail improved like-for-like from the
previous fiscal year's -2.4% to -1.1% in the FY10/11. Total retail
space increased 5.3% year-on-year, excluding stores under 33-store
closure program. Particularly strong growth in turnover was noted in
China, which is now the company's second-biggest market. Comparable
store sales growth there improved from -6.0% last year to 2.7% this
year.

In wholesale, Esprit's sales declined as a result of both
generally weak economic conditions worldwide and Esprit's deliberate
policy of withdrawing from unprofitable or brand diluting accounts.
In Germany, the company's main market, wholesale local currency
turnover trend improved significantly from -15.6% in the FY09/10 to
-3.0% in FY10/11.

Results were significantly impacted by the exceptional events. The
net profit before exceptional events amounts to HK$2,352 million.
Including the divestment of North American operations costing
HK$1,268 million and additional store closures costing HK$1,005
million, net profit for the Group amounts to HK$79 million.

Esprit´s net cash position remains strong at approximately
HK$2,714 million as at 30 June 2011. The Board of Directors adhered
to the Company's dividend policy. As a result, no final dividend is
recommended since the interim dividend, which had already been paid,
exceeds the 60% regular payout ratio.

ESPRIT HOLDINGS LIMITED
AUDITED CONSOLIDATED FINANCIAL DATA
(in HK$ million, with the exception of dividend per share)

| |For the year |For the year |
| |ended |ended |
| |30 June 2011 |30 June 2010 |
| | | |
|Turnover |33,767 |33,734 |
|Gross profit |18,198 |18,436 |
|Profit before taxation |710 |5,474 |
|Net profit |79 |4,226 |
|Cashflow from operating |1,835 |5,412 |
|activities | | |
|Cash and bank balances |4,794 |6,748 |
|Bank loans |2,080 |2,600 |
|Total dividend (per share) |HK$1.00 |HK$1.41 |
| Final dividend (per share) |Nil |HK$0.67 |
| Interim dividend (per share) |HK$1.00 |HK$0.74 |

Esprit Holdings Limited ( www.espritholdings.com ) is a
constituent stock of the Hang Seng Index, MSCI Hong Kong Index, FTSE
All-World Index for Hong Kong, S&P/HKEx LargeCap Index and S&P Asia
50 Index. Its subsidiaries are engaged in the retail and wholesale
distribution of quality lifestyle products designed under its
globally recognised Esprit and edc brands. The Group operates over
1,100 directly managed retail stores worldwide and distribute through
more than 11,000 controlled space wholesale point-of-sales
internationally, occupying total selling space of over 1,000,000m2 in
more than 40 countries.

The information contained herein is not a public issuance of
securities. These materials do not contain or constitute an offer of
securities for sale in the United States or to any "U.S. Person" as
defined in Regulation S under the United States Securities Act of
1933, as amended (the "Act"). The securities referred to herein have
not been and will not be registered under the Act, and may not be
offered or sold in the United States absent registration under such
Act or an available exemption from it.

Forward-Looking Statements

This news release contains certain forward-looking statements.
Such forward-looking statements are subject to various risks and
uncertainties, including without limitation, statements relating to
our plans to transform the company's business, make significant
investment in our businesses and achieve sustainable profitability in
the future, and other risks and factors identified by us from time to
time. Although the Group believes that the anticipations, believes,
estimates, expectations and/or plan stated in this document are true,
actual events and/or results could differ materially. It cannot
assure you that those current anticipations, believes, estimates,
expectations and/or plan will prove to be correct and you are
cautioned not to place undue reliance on such statements. The Group
undertakes no obligation to publicly update or revise any
forward-looking statements contained in this document, whether as a
result of new information, future events or otherwise, except as
required by the Rules Governing the Listing of Securities on The
Stock Exchange of Hong Kong Limited or any other applicable laws and
regulations.

Party responsible for investor enquiries:
Patrick Lau
Tel: (852) 2765-4232
e-mail: esprit-ir@esprit.com