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Esprit announces plans to raise US$677 mil. in new share issue

HONG KONG--Clothing retailer Esprit plans to raise up to US$677 million in a new share sale to rebuild its brand as part of a multibillion-dollar four-year transformation drive, a report said Tuesday.

Up to 655.8 million shares will be sold at a price of HK$8 (US$1.03) each, a 36 percent discount from Monday's close of HK$12.44, Dow Jones Newswires said.

If successful the firm could raise as much as HK$5.25 billion (US$677 million).

Esprit — founded in San Francisco in 1968 and headquartered in Hong Kong — has announced its exit from Spain, Denmark and Sweden to focus on Asia, especially China, as part of a transformation after it saw a 98-percent plunge in net profit last year.

However, net profit for the year to June 30 jumped tenfold to HK$873 million (US$112.59 million), from HK$79 million a year ago.

The new focus is a change from its previous international expansion drive that former CEO Ronald Van der Vis, who suddenly resigned earlier this year, said had caused the company to have “lost its soul.

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