ESPRIT FAR EAST, EUROPE WILL MERGE OPERATIONS

Byline: James Fallon

LONDON--Esprit Far East Ltd. and Esprit de Corp. GmbH plan to merge their operations to improve design, marketing and sourcing for both companies.
Esprit Far East is the Hong Kong-based holding company for the European subsidiary. The Dusseldorf-based Esprit de Corp.'s largest shareholder is Michael Ying, who owns 60 percent of the European operation and who is chairman and chief executive of the Far Eastern firm. He will be chairman and chief executive of the combined companies.
The remaining shares of the European operation are held by Juergen Friedrich, who helped set up the subsidiary in 1976 and who holds 30 percent, and Susie Tompkins, the majority shareholder in Esprit U.S. and owner of 10 percent of Esprit de Corp. in Europe.
John Watson, chief operating officer of Esprit de Corp., said the merger is aimed at tidying up the shareholding structure of the two companies. Both Friedrich and Tompkins will receive shares in the new holding company, he said, adding the changes do not affect Esprit U.S. Ying owns 33 percent of the U.S. Esprit and Tompkins owns the remainder.
The merger of the two companies will not result in significant changes in the management or structure of the marketing organizations in either Europe or the Far East. Watson will continue as chief operating officer in Europe, reporting to Ying. Eugene Lee will remain chief operating officer of Esprit Far East, also reporting to Ying W. John Short, who was chief executive of the European subsidiary, has resigned for personal reasons, the company said. Watson said Short's leaving was not related to the merger, but he declined to elaborate.
Esprit Far East bought its stake in the European company in 1992, and at that time indicated that it eventually aimed to gain full control, Watson said. There will be no significant changes in the structures of the two companies. Esprit in Europe will maintain its design studios in Dusseldorf, Amsterdam and Paris.
"The aim is to get the economic interests of all the shareholders aligned and to take advantage of the synergies between the two companies more than we had in the past," Watson said. "For example, Esprit Far East is strong in retailing, while we are stronger on the design side."
Esprit has embarked on a major expansion program in Europe and revealed plans this summer to open 30 freestanding stores in the next 18 months. The European operation had sales of about $374 million last year. Its largest market is Germany.

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