By  on March 23, 2010

NEW YORK — Esprit has a lot riding on the launch of its largest U.S. flagship on Thursday.

Esprit Holdings Ltd. is looking to the 18,000-square-foot store at 21-25 West 34th Street, on one of the city’s busiest shopping corridors, as a retail catalyst.

The three-level flagship features a new interior design and will carry the casual and collection lines for men and women, the trendy and playful edc and de.corp, a modern, urban label bowing in the U.S. for the first time.

The store environment is different from other Esprit units. Minus the red portals and shiny white surfaces of typical Esprit stores, the flagship aims to convey an air of authenticity. There is paneling made from repurposed wood, as well as images and props borrowed from the spring ad campaign that has the theme of a road trip through the desert: murals of a car junkyard and denim-covered cacti to suggest the stretch of highway between Las Vegas and Los Angeles.

“Our stores were looking very dated,” said John Gunn, president of Esprit North and South America. “We want to display the product correctly. We’re bringing the brand and look of the store into the future.”

The flagship was inspired by the Memphis Group, the Italian design and architecture movement of the Eighties led by Ettore Sottsass, who designed Esprit’s first store.

“We took a lot of the old things Memphis had done and updated them,” Gunn said. For example, the action areas, where mannequins and products are grouped on cubes and rectangles of various sizes and heights, are a Memphis influence. With interesting construction materials and unusual props, the flagship was designed to be more sophisticated than the last store incarnations.

“A three-story glass staircase with floating steps and brushed and stainless steel details is a monumental architectural element that seems light as air with its clear railings,” he said. “Mannequins are dressed in complete outfits styled down to the socks worn with sandals and neckties used as belts.

Esprit’s signature red door has been replaced by a dark gray entry. Walls are painted dark gray with spotlights on ceiling tracks trained on the clothing. Large window fixtures are backlit, which makes the shopping experience more moody and nuanced.

Gunn isn’t relying merely on a new store design to raise Esprit’s fortunes in the U.S. Esprit has struggled to regain the success it had in the Eighties and Nineties. The company closed its last stores in 2002 and relaunched in 2004, trying to recapture its previous momentum.

“Esprit is not the same brand that it was back in the Eighties or Nineties,” he said. “We have grown up quite a bit since then and have developed a much better assortment of product. There’s really something for everyone, from sophisticated cocktail dresses and suits, to casual Ts and denim, to the more funky and hip styles.”

Gunn said Esprit’s designers are more aware that consumers in the U.S., Europe and Asia are different.

“We came in with this European product that’s never been sold in the U.S.,” he said. “A lot of our business is done in Europe and the brand is quite Eurocentric. While Europe initially had a major influence on the design, our U.S. merchandising team is now part of the creative process, offering insight and influence as to what is needed for the U.S. consumer. We want to make sure we get the line right for the U.S.”

The merchandise includes a gray leather jacket, $349.50; a blue silk dress with twist detail, $129.50, and a leather handbag with braided strap, $249, from collection. There is edc’s acid-washed grommet leggings, $69.50, and de.corp’s fashion anorak, $139.50. From the Heritage collection, the store offers reinterpretations of Esprit’s greatest hits. A brown suede jacket is $329.50 and an Esprit logo sweatshirt, $45.

To promote the flagship’s launch, Esprit lamppost banners on West 34th Street read, “Love it. NYC. Esprit.” On Thursday and Friday, the store will hold a Love It or Leave It promotion during which the first 50 customers to arrive at 9 a.m., noon and 5:30 p.m. will receive armbands. They can walk out with free outfits worth $150 or less, leaving their own clothing, which will be donated to charity, in the dressing rooms.

Comparable-store sales at Esprit’s 17 stores and 13 outlets this year are running 6 percent ahead of 2009, Gunn said. For the six months ended Dec. 31, Esprit Holdings reported net profits slid 5.2 percent to 2.71 billion Hong Kong dollars, or $349.6 million at average exchange rates compared with the year-ago period. Sales volume fell 3.1 percent to 18.5 billion Hong Kong dollars, or $2.39 billion. Retail sales rose 9.5 percent.

“We’re going to take a good look at how business is performing” before committing to more stores, Gunn said. “We have to look at clustering. We’ve been on the West Coast and we do very well in Texas and Florida. There may be more opportunities in New York City. We’ll have 70,000 square feet in Manhattan with five stores. There could be two to three more opportunities in Manhattan and possibly even more.”

There’s also the possibility of launching freestanding stores for several Esprit lines. “I do see the potential of breaking off edc stores and collection stores,” Gunn said. “Edc has a lot of room for growth.”

Esprit also sees expansion opportunities for the new store design and the outlet sector.

“We put the wholesale business into hibernation,” Gunn said. “We maintain a very small wholesale business. It’s not anything we’ve concentrated on. It’s something with a lot of opportunity going forward — a tie-in with a major department store. As a brand that wants to grow from coast to coast, we’ve been very openly exposing ourselves to department stores.”

Esprit’s wholesale distribution consists mainly of specialty stores. The brand’s strongest wholesale partners are online retailers such as Zappos.com and Amazon.com, said Gunn. “We’ve got to get our legs a little less wobbly,” he added. “Once we have created a strong platform here, we will be reaching out to the major wholesale partners.”

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