Esprit has recovered a little esprit de corps. An investor briefing on a three-year transformation plan gave some pep to the shares of the biggest Hong Kong-listed clothing chain on Wednesday. Even with a 6 per cent lift, Esprit remains the year’s worst performer by far on the Hang Seng benchmark, down more than three-quarters amid plunging profits.

Chief executive Ronald Van der Vis was absolutely right in September, when he said that the brand had “lost its soul.” The retailer founded in San Francisco in 1968, when Susie and Doug Tompkins sold clothes out of the back of a station wagon, was simply going through the motions long before sales and earnings peaked in the year to June 2008. In the five years before that, the ratio of capital expenditure to sales had fallen by almost a quarter from the long-run average. Stores were shabbier and more cluttered than those of Hennes & Mauritz or Inditex’s Zara, which also went much bigger on advertising. In recent years Esprit has spent about 2.5 per cent of sales on branding and marketing, well below the peer-group average of 4 to 5 per cent. A pledge to lift both ratios well above industry norms until 2015 is belated recognition of serious neglect.

Other turnround measures seem sensible: rationalise Europe (81 per cent of group revenues in the last quarter), sell the lossmaking North American arm, and push further into China. There, sales are beginning to pick up. But Esprit remains a distant third in outlets behind Etam of France and Denmark’s Bestseller. For now, insiders feel the stock-selling has gone on long enough: net share purchases by management and top shareholders since mid-September amount to almost 30m, or 2 per cent of the float. But in the absence of hard evidence of Esprit’s brand reinvigoration, others should sit this out.