By  on September 18, 2008

By Joanna Ramey

Before Esprit became a symbol of California cool, its origins were in making minidresses with puffed sleeves under the label Plain Jane — a hip look its founders spotted in late-Sixties London that was hard to find in the U.S.

Two friends, Susie Tompkins and Jane Tise, sold the frocks out of a storefront in the San Francisco neighborhood of North Beach.

“It was a funny evolution,” recalled Tompkins, now Susie Tompkins Buell, of the early days that presaged Esprit’s rise to cult status in the Seventies and growth to $1 billion in sales by the mid-Eighties.

The boutique was across the street from a mountaineering equipment store, The North Face, started by Tompkins Buell’s husband at the time, Doug Tompkins, and a business partner. Both retail endeavors fit well with San Francisco of that era — a center of the American counterculture led by young people challenging the status quo.

Such were the times that the locally based Grateful Dead played at The North Face store’s opening party, according to a book about the band, “A Long Strange Trip.” Guests included sister activists and folk singers Mimi Fariña and Joan Baez. “Two Hells Angels acted as security,” author Dennis McNally wrote.

After a couple of years, Tompkins sold The North Face (now owned by VF Corp.) and set his sights on helping to expand Plain Jane, soon renamed Esprit de Corp.

“I had had enough of retail with The North Face and convinced Susie and Jane that I would join in and do the business side and find the start-up money, but only if it was wholesale, so we weren’t slaves to store hours and meeting the public,” said Tompkins, who sold his share of Esprit in 1990, after he and Susie divorced. (Tompkins corresponded with WWD from South America, where he lives in Chile’s lake district in Pumalin Park, 742,000 acres of temperate rain forest he’s preserved through his own donations and that of the Foundation for Deep Ecology, which he founded. The park caps a lifelong focus on the outdoors, including his days trekking the globe with Patagonia founder Yvon Chouinard as a frequent partner. Kristine McDivitt Tompkins, a former Patagonia chief executive officer, is now married to Tompkins and is his partner in conservation.)

With neither Doug nor Susie Tompkins familiar with the inner workings of the garment business, “looking back now, I see that we somehow intuitively had the idea of how to put all the pieces together,” said Doug Tompkins.

“We were very entrepreneurial, very young, very energetic. We were on the cutting edge,” added Tompkins Buell, who left Esprit in 1996. She still resides in Marin County, near San Francisco, and is the founder of the Susie Tompkins Buell Foundation, which helps to finance efforts to promote young women leaders. She also is an active fund-raiser for Democratic women politicians and worked on the presidential campaign of her friend Sen. Hillary Rodham Clinton.

Esprit got a foothold in the U.S. market as the Tompkinses and Tise joined forces with Allen Schwartz (now with the Los Angeles fashion and accessory brand A.B.S by Allen Schwartz), who marketed the growing concern’s loose-fitting California clothes to U.S. department stores.

In the late Seventies, with Esprit sales reaching $120 million, Schwartz and Tise, the chief apparel designer, sold their shares of the company to Susie and Doug Tompkins.

They were ready to branch out internationally and formed Esprit partnerships in Hong Kong and Germany that brought the brand to Europe and the Far East. Today, these markets are the cornerstones of the company’s operations.

George Hensler, who signed on to create the Esprit accessory business, remembers how the brand’s cachet caught fire globally in the Seventies. “Esprit truly was the California fashion trend,” said Hensler. Of the many best-selling Esprit accessories, Hensler remembers the popularity of high-top sneakers in 15 colors, and a big canvas tote bag with drawstrings.

“We sold the tote to Bloom­ingdale’s and they put it in a window,” said Hensler, of the early Esprit marketing coup. Although tote sales at the Manhattan retailer’s flagship were strong, Hensler was disappointed. “Only the fashionable people in New York were carrying the tote,” he said, speaking to the company’s mind-set of marketing to a mass audience of everyday young people.

“Ultimately, Esprit’s customer base became people 18 to 20 or so, which was good news. I think that is why it had so much early success,” said Hensler, who described the Tompkinses as “the antithesis of the garment industry in New York.”

At company expense, Esprit employees were offered foreign language classes, tickets to cultural events, white-water rafting trips and travel sabbaticals. There was a subsidized gourmet cafe at its headquarters in a converted San Francisco winery. Doug Tompkins’ extensive Amish quilt collection hung on the brick walls. So as not to mar the softwood floors, high heels were banned. There were also tennis courts and a running track on-site.

Esprit’s fashion mojo became so potent that wholesale and department store apparel buyers traveled to San Francisco to place orders, instead of the industry standard of vendors going to buyers, trade shows or showrooms to sell their wares.

“Esprit in those days was in a world of its own,” recalled Corrado Federico, who held various posts at the company, including president in 1986. “But the success wasn’t strictly in the product. The tremendous anchor was its lifestyle concept and image. It was youthful, it was aspirational, it was captivating. There was nobody around at the time who could match us.”

Responsibilities were divided as sole owners of the company: Tompkins Buell took charge of the fashion and Tompkins focused on fine-tuning the back office and promoting the company’s image — a job he was well suited to do. In addition to his passion for trekking, Tompkins is a devotee of design, even penning a book about his philosophies of marketing and graphics. “Esprit: The Comprehensive Design Principle” was published by Japanese art publisher Robundo in 1989 and is used as a design reference tome.

One of Tompkins’ first marketing moves was to have a logo created by San Francisco graphic artist John Casado, whose work included the early branding of Apple’s Macintosh computer, designing the format of the Italian magazine VICTIM and creating the trademark for New Line Cinema. For Esprit, Casado created the still widely recognized stencil-like logo of the company’s name, with three horizontal bars for the “E.”

“My concept was basically that these clothes were in constant motion. They were made, shipped and people were wearing them, so the stenciled lettering was all about the immediacy of labeling things, whether it’s wood crates or boxes,” Casado said. He picked red for the logo because the color represents danger and which “young people would see as unique and exciting.”

Casado recalls how focused Tompkins was about design and art in culture and commerce. Their first meeting was in Tompkins’ green-on-green Craftsman-style home on San Francisco’s Russian Hill with a black swimming pool. “He also had the largest collection of Graphis magazines that I had ever seen,” Casado said.

For catalogues and ad campaigns, Tompkins also hired image-making design pros like photographers Oliviero Toscani and Robert Carra. Japanese graphic artist Tamotsu Yagi created an overall Esprit design aesthetic that touched on all aspects of the business, from in-store signs to garment labels.

“Doug really had no interest in the clothes,” Casado said. “He had an interest in the business and understood it. His job was to sell, whatever it was. In some of the later catalogues, he wanted to sell TV sets and other things design-oriented. He wanted young people to have a culture.”

In fact, in its ads and catalogues, the clothing was downplayed. Employees and everyday people were used as Esprit models with captions highlighting something about them, or what they did that day. There was also an undercurrent of activism. There were Esprit guest speakers, like consumer activist Ralph Nader and Body Shop founder Anita Roddick, who refused to sell animal-tested cosmetics.

In 1987, a letter from Doug and Susie in an Esprit mailer asked the public to help confront the AIDS epidemic. Three years later, the company came out with ads urging people to “buy only what you need” — a message that seems antithetical to an apparel company.

As the corporate culture was maturing, so was the Esprit business. “Competition got fiercer by the minute,” recalled Federico.

To further boost the brand, Esprit in the mid-Eighties began opening U.S. stores, starting with a 15,000-square-foot unit in Los Angeles. There would be 14 stores opened with mixed success.

Meanwhile, the company’s business flagged. There were various criticisms about the cause, like missed fashion trends, high production costs in Asia, budgets too big for the retail stores, the delay in getting into retail and differences between the Tompkinses over the company’s direction.

“When the business got tough it was more about how the retail industry had changed,” concluded Dick Baker, who in 1986 became president of Esprit’s women’s division, noting how for years Esprit and Guess had been “the two dominant junior players in the country.”

In 1990, when Tompkins decided to be bought out of the company to focus on environmental stewardship, Tompkins Buell, with a group of investors, took control of Esprit. Mixing social awareness with commerce, she sought to produce environmentally friendly apparel. To broaden the customer base, Esprit came out with an earth-tone tailored career line for Esprit customers who’d grown up. It bowed at a fashion show that included a sermon from a reverend on challenges facing inner city youth.

In the coming years, Esprit’s financial picture improved somewhat but the company still struggled. In 1996, after a succession of ceo’s, former Liz Claiborne and Tommy Hilfiger vice chairman Jay Margolis took the helm. With investors, Margolis bought Esprit’s defaulted loans, which put him in control of the company.

“We were trying to be too cheap, too L.A. market-driven,” Margolis told WWD in 1996, soon after taking the Esprit job. “I want to be looking at what Donna Karan and Calvin Klein are doing, and be influenced by that market.”

As part of his strategy, Margolis — who is credited with Esprit’s turnaround in his four years there — also repositioned the brand with college and young career women instead of teenagers, opened more company-owned stores and reintroduced the catalogue, absent for 10 years. Collections became smaller and more focused and shipped twice monthly instead of once. To diversify, the company licensed its Esprit Beach swimwear, signed a license to produce DKNY Kids children’s wear and launched an online store.

Margolis left Esprit in late 1999, having repositioned and restored the luster to the company — an achievement that gained him credit in the industry for sparking a revitalization of the junior girls’ apparel business and helping to pave the way for junior sportswear lines that launched soon after from Ralph Lauren, Tommy Hilfiger and Donna Karan.

Doug Tompkins said he still sees threads of Esprit in retail enterprises worldwide.

“Recently, in London, I was amazed that even 20 years later I could see influences in store design, advertising, products, graphics that came from our studios, although those doing them I’m sure were unaware of the origins of some of the ideas. Here in Argentina and Chile, I see the same thing. Rather amazing and humorous, actually.”

Tompkins is also writing a new design book and doesn’t reflect kindly on the garment industry. “I know that my ideas are a lot different now,” he said. “I look back at those days in the frivolous fashion industry as being perhaps helpful in learning the craft of design. But the products and the markets I have come to see as totally vacant — and in fact dangerous — in that they have led to this world of thoughtless consumption that is destroying the world and has brought us global climate change and a soulless society.”

Looking back, earlier ceo Federico considers Esprit to have blazed the trail for other sportswear companies’ use of lifestyle marketing. “The Gap learned from us,” among others, Federico said.

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