(Updates with closing prices in second paragraph.)
Oct. 13 (Bloomberg) -- Esprit Holdings Ltd., the biggest Hong Kong-listed clothing retailer, gained the most in almost three years after saying a magazine may have used outdated figures in report the company overstated China store numbers.
The clothier climbed 16 percent to HK$11.78 at the 4 p.m. close in Hong Kong. The company has slumped 36 percent since announcing Sept. 15 that profit dropped 98 percent last fiscal year.
“Investors had some doubts yesterday regarding reporting disclosure, and they have now been addressed,” Aaron Fischer, an analyst at CLSA Asia-Pacific Markets, said in an e-mailed response to questions today.
Esprit fluctuated this week in Hong Kong trading, gaining 12 percent on Oct. 11 after Lone Pine Capital LLC, a Greenwich, Connecticut-based hedge fund, doubled its stake to 6.23 percent. The shares plunged 7.5 percent yesterday after Next Magazine reported the clothier’s website listed 30 outlets in Shanghai and Shenzhen that either didn’t exist or couldn’t be reached.
Esprit said the number of outlets it disclosed with earnings was accurate as of June 30, and that it updates the website only occasionally and it knew of no other reason for its stock to move, according to Hong Kong stock exchange filing yesterday.
Web Site Update
“The Next article probably picked up the numbers from our store finder on the website,” Chief Financial Officer Chew Fook Aun said in a phone interview yesterday in Hong Kong. “That website is only updated every so often, so it may not reflect the current status.”
Profit plummeted last fiscal year on costs to close stores and sell the North American operations as Esprit contends with intensified competition.
The retailer that started in California more than 40 years ago had 300 directly operated stores in China as of June 30, a net increase of 12 from last year, it said in its annual report. It had 712 franchises, 69 more than last year, bringing the total outlets to 1,012.
Esprit plans to more than double sales in China, the world’s most populous nation, in four years to make up for declining demand in Europe. In the year ended June, it had HK$2.68 billion ($344 million) in revenue from China, its fastest-growing market.
--Editors: Dave McCombs, Subramaniam Sharma
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