Esprit falls on reported China-outlet exageration

HONG KONG (MarketWatch) -- Shares of Esprit Holdings Ltd. plunged as much as 10% in Hong Kong trading Wednesday, wiping out gains from the previous session, with the weakness coming after a Hong Kong media report that the clothing retailer misstated the number of outlets it operates in China. The Chinese-language magazine Next reported in its latest issue that Esprit exaggerated the size of its retail network in mainland China. Esprit stock had come under pressure since September, when the company reported its annual profit fell 98%, prompting its chief executive to muse that the brand had "lost its soul." Shares of Esprit ended morning-session trade with an 8% loss. Next magazine reported in May that Hong Kong-listed fruit-and-vegetable grower Chaoda Modern Agriculture Holdings Ltd. exaggerated the size of its mainland Chinese growing operations, allegations that were later explored in more detail in equities research by hacker group Anonymous Analytics. Chaoda shares were suspended from trade last month.Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.

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