Esprit Holdings Limited, which is based in Hong Kong and has grown rapidly outside the U.S., is making its way back to the North American retail scene. To begin with, the company has just signed a lease for its fourth New York store, located at 600 Fifth Avenue, in the heart of Rockefeller Center. Esprit is aiming for a November opening for the 14,412-square-foot space, which was previously occupied by a Barnes & Noble.
The new location comes after a quiet time for the brand, which in 2003 plotted an aggressive expansion program in the U.S. The plan then was for megastores and major advertising campaigns, but the firm was forced to take a step back when the business here didn't perform.
"We didn't start out so well in the U.S.," admitted Jerome Griffith, president of Esprit North America, in an interview in its New York offices. "Everyone still thought of Esprit as a junior brand, which we weren't known for anymore outside of this country. So when we came here and presented ourselves, everyone hated us. Macy's hated us, all of our wholesale partners really hated us and they didn't know how to present Esprit in their stores."
As it scaled back on wholesale, Esprit opened three Manhattan stores between 2004 and 2005 in the Flatiron District, Time Warner Center (Manhattan's best-performing location, according to Griffith) and SoHo. Additionally, the brand opened 13 units, mostly mall-based, in the Northeast. The Rockefeller Center location will be the first store to open since 2006. This year, the brand plans to open about 10 more stores and 25 shops-in-shops throughout North America. All together, within the next few years, Esprit will spend about $70 million on North American stores.
According to Griffith, the company's strategy of opening its own stores in the U.S. helps the customer to understand Esprit as it is today. While there is EDC, the junior sportswear element, he wants the American consumer to see the brand for its collection business, which targets a working woman who doesn't want to be trendy, but trend-right.
"Our girl works for a living. Her tastes are more traditional, but she wants to look modern," he explained, "and she doesn't want cheap fashion. She wants quality."In another effort to target the North American consumer, Griffith said his design team had tweaked the line, paying more attention to fabrics and the fit of the garments.
"We've made some big improvements," he said, "which our wholesale accounts will be really happy with."
Griffith said the Esprit brand currently was sold in about 140 department and specialty doors nationwide, including Dillard's and Nordstrom. By the end of this year, he expects that business to grow by 40 percent.
Also to help boost business in the U.S., Griffith said he was paying more attention to marketing, but not in a traditional way.
"There are many more ways we can market the brand, rather than taking an ad in a magazine," he said. "We will sponsor events and place our stores in more prominent places — all to create a buzz around the brand. I am the first to admit that we have done a poor job at marketing in the U.S., but we really wanted to be sure to focus on getting the product right."
Griffith said North American consumers could count on seeing much more from the brand. In addition to the 400 stores Esprit is scheduled to open in the next four years worldwide, the company will launch a jeans line in August 2008, bring men's wear back into the stores and begin to develop separate EDC stores, which are currently in Europe.
Esprit reported a 28 percent jump in earnings, to 2.4 billion Hong Kong dollars, or $309 million, for the six-month period ended Dec. 31. The group said earnings per share rose 25.6 percent, to 1.96 Hong Kong dollars, or 25 cents, and net cash increased to 3.6 billion Hong Kong dollars, or $463 million, for the period.
Group turnover grew 23.4 percent, to 14.6 billion Hong Kong dollars, or $1.9 billion, with North America recording a 9.7 percent turnover growth, to 369.2 million Hong Kong dollars, or $48 million. This is about 2.6 percent of the group's turnover.
The U.S. market also saw double-digit growth in same-store sales.
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