ES in fashion chain Esprit dropped yesterday after it was claimed that it had exaggerated the number of stores it has in China.
The company has said it has 498 outlets and 404 retail spaces in department stores in mainland China – a number disputed in a report in Next magazine.
Next reported that it had found numerous instances of exaggeration, saying that out of 37 directly operated stores and 35 sales counters in department stores in Shanghai, seven of the total did not exist and reporters were unable to contact 13 with the telephone numbers provided. Esprit is the largest clothes company listed in Hong Kong and has said it plans to double its sales in China to offset weak European markets.
According to the company’s annual report Esprit had 300 directly operated stores in China at 30 June. That represents a net increase of 12 from last year. The company shares went down 14 per cent after the dispute surfaced.