Spotlight on...Esprit progresses with turnaround plans
In September last year, fashion retailer Esprit revealed a bold turnaround strategy. In an update yesterday (23 February), the company revealed how these extensive plans are set to touch all areas of its business.
Among its plans are the shuttering of its North American stores while also seeking a licence partner in the region, a new branding strategy, a new sourcing strategy, a hybrid store/franchise model in China, and a new wholesale strategy.
North America and store closures
When Esprit announced its revitalisation plans last year, the most attention-grabbing element was its decision to exit its North American retail operations. Esprit now says it will wind-down the business by 31 March, after deciding not to sell it. However, the company is not giving up on North America entirely, revealing that it is looking to work with a licence partner there.
Describing the reasons behind not selling the business, it said: "We are not willing to compromise on brand positioning and distribution channels.
"Given that the focus of our transformation process is to re-establish the Esprit brand as a leading, inspiring fashion brand, we were not willing to jeopardise our efforts by a potential different brand execution in North America.
"Hence, we believe that pursuing the option to close down the operations in North America and develop the licensing business with one or more competent license partners will serve the best interests of the group."
The store closures announced in September also remain on-track, with over 50% of the 80 stores slated for closure now shuttered or in final negotiations.
New branding strategy
Esprit's first efforts under its new branding strategy have seen "very encouraging results". The first campaign, which featured model Gisele Bündchen, helped raise consumer awareness, with a 9 percentage points rise to 59% in Germany, and a rise of 19 percentage points to 49% in China.
It has also launched a new Trend division, a China design centre and a new denim division. Esprit said the Trend division is expected to have its first product delivery in September this year, while the China design centre has already delivered its first concepts, with new product designs being launched in August. The company is already including new fits in its denim lines, with the first styles to be in store by December.
With a focus on making its products more fashionable, a more frequent six-season calendar with 12 deliveries will help ensure the "continual flow of products throughout the season".
And following the successful roll-out of its new concept store in Cologne, there are now plans to refurbish some 14 stores in key locations over the second half of the year. In addition it will also open two other store concepts, in Antwerp in April and Dusseldorf in July.
Esprit also revealed a new sourcing strategy, opening a never-out-of-stock service centre to optimise availability and inventory. It is also setting up new sourcing offices in Indonesia and India, to "realise further potential". The offices will open in the second and fourth quarters respectively.
In order to deal with the huge market size and demographic differences among provinces in China, Esprit plans to work with national and regional franchise partners to accelerate its expansion in the country. It aims to open around 40 stores in the country during the second half.
The company also intends to launch its first Asia-Pacific e-shop in China over the second-half of the year.
Key wholesale accounts
Some 650 wholesale accounts have been selected as key partners for whom Esprit has tailored support packages to help drive growth.
It is also working to develop its wholesale business in regions where it is under represented, such as Asia and Latin America. Over the half, the company saw "robust wholesale turnover growth" in Thailand, Philippines, Indonesia, Chile and Columbia.
Speaking about its outlook, the company said the results represent an "early and very important step on our route to seeing the entire plan through, and this good result has confirmed that...we are definitely heading in the right direction.
"Looking beyond this financial year, we are even more confident that we will see the tangible results of our hard work materialise in 2013 and succeed in turning Esprit into an inspiring and fashionable brand with sustainable profits and a clear identity."
Featured reports from just-style's research store this week include profiles of US lingerie retailer Victoria's Secret and fashion retailer Esprit, a look at the footwear markets in Indonesia and Taiw...
The stagnating UK economy means that for many retailers and brands, growth will have to come internationally. An event hosted recently by the British Retail Consortium (BRC) outlined the opportunities...
Top stories on just-style this week included a report on clothing brands seeking a forum to raise concerns with the government in Bangladesh, an article on how cooler weather boosted UK clothing sales...
Hong Kong-based clothing brand Esprit has seen its share price soar after announcing the appointment of Jose Manuel Martínez Gutiérrez as CEO and executive director....
Fashion brand and retailer Esprit has announced a number of new management appointments a month after the company, which is in the midst of a transformation plan, reported the departure of its CEO Ron...
Esprit has announced that Hans-Joachim Körber has resigned from the apparel brand as chairman of the board and independent non-executive director, effective 13 June. ...
Esprit suspended the trading of shares in its company today (13 June) after its share price slid following the resignation of its CEO. ...
- Cotton supply chain transparency an ongoing issue
- What does supply chain mapping really mean?
- Supply chain takeaways from Sourcing at MAGIC
- No simple way to be sustainable, says SAC CEO
- Why voters don’t want more global supply chains
- Nike and Crystal Group "doing well by doing good"
- Li & Fung eyes supply chain speed in 3-year plan
- Cambodia’s focus on garment production also a risk
- C&A helps grow organic cotton production in China
- US Q2 in brief - G-III Apparel, A&F, Sears
- Too Many Standards
- Myanmar's Garment Sector in 2015 - now with updated members' directory
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Under Armour, Inc. (UA) - Financial and Strategic SWOT Analysis Review
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras