By  on June 8, 1994

LONDON -- Recognizing the changing retail scene, Esprit Europe is on an expansion drive that includes plans for more than 30 new freestanding stores throughout Europe over the next two years.

Esprit Europe, based in Dusseldorf, Germany, is expected to have sales of about $374 million (625 million marks) in the year ending June 30, said John Short, the company's chief executive officer, in an interview during a recent visit here.

The company's future focus, Short said, will be on opening freestanding stores or leased departments in department stores and by wholesaling to department stores and specialty chains rather than relying on wholesale sales to independent retailers.

Independents have been an important part of the group's European business over the last 18 years, he noted. However, the entrance into Europe of such vertical retailers as The Gap will put pressure on these independents, especially in smaller countries, he forecast. In addition, Short said, the elimination of all internal customs barriers and the pooling of European quotas after Jan. 1 will mean retailers like The Gap will be able to establish centralized distribution centers and speed up the grabbing of market share from independents throughout Europe.

For this reason, Esprit Europe must accelerate the opening of its own freestanding stores and strengthen its involvement with financially strong department or specialty stores in Europe, Short said.

Esprit Europe's largest market currently is Germany, where it has 34 freestanding stores and 210 doors of wholesale customers, including such department stores as Karstadt and Kaufhof. Its German sales are about $299.2 million (500 million marks) a year.

Esprit Europe is experimenting with new retail formats in Germany, including a trial store selling only its footwear and accessories. The company will open another freestanding store in Germany in its next fiscal year and add another 100 wholesale customers, especially in such categories as men's wear, footwear and accessories, Short said. It also may introduce in Europe an intimate apparel line that was developed, and is now on sale, at Esprit Far East.

"We are pretty well represented in women's wear in Germany with Esprit corners in most major department stores," he said. "Now we want to grow the children's wear, men's wear, footwear and accessories businesses by adding corners for those categories."

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