Krogner Denies Esprit-Roberto Cavalli Deal in the Works
Although Esprit remains on the luxury acquisition trail, the lifestyle company said Roberto Cavalli isn't in its sights - and the Milan fashion house also vigorously denied speculation it is in talks with Esprit.
BERLIN — Although Esprit remains on the luxury acquisition trail, the lifestyle company said Roberto Cavalli isn't in its sights — and the Milan fashion house also vigorously denied speculation it is in talks with Esprit.
Heinz Krogner, Esprit chairman and group chief executive officer, confirmed the company's ongoing interest in buying a luxury brand. However, while he said Esprit easily can afford to invest 1 billion euros, or $1.42 billion at current exchange, in such a deal, he emphasized such an acquisition "is not necessary for us. We're growing substantially without acquisitions," he told WWD in a telephone interview from Esprit's business headquarters in Ratingen, Germany.
In the fiscal year ended June 30, Esprit Holdings Ltd., which is based in Hong Kong, reported a 26.9 percent increase in group sales to 29.6 billion Hong Kong dollars, or $3.8 billion, with net profits up 38.6 percent to 5.2 billion Hong Kong dollars, or $66.7 million. All dollar figures are converted from the Hong Kong dollar at an average rate for the period.
Esprit Holdings currently encompasses the vertical Esprit and edc lifestyle brands as well as Red Earth cosmetics.
Krogner's interest in moving into the luxury segment is not new. The ceo didn't deny having been in earlier talks with Escada, Puma and Jil Sander, but "in the past, private equity firms pushed up the prices. They seem to be pulling back a bit at the moment," he said.
As for reports Esprit was eyeing Cavalli, "that's a total fabrication," he countered. "We're not thinking about nor are we in any talks with Cavalli. There are a lot of brands all over the place...such as all the family companies in Italy that are having problems finding successors."
In considering Esprit's acquisition options, Krogner said the decision was made not to move into a lower price segment. "There'll always be someone cheaper. And [buying] a direct competitor also made no sense. But a luxury acquisition could be interesting for the Holding. For one thing, we'd have access to the best design talent.
"Of course, if we bought a [luxury] brand, it would remain in its position. But the team running the brand could provide a taste level, design excellence and train Esprit's people," he explained. "To have a more expensive sister would be good for Esprit and provide a learning curve."However, he's also convinced Esprit's aggressive business approach could equally benefit a luxury brand. "With our business model of 12 collections a year, our internationality and our short time to market, we could revolutionize the luxury segment. They have to increase the offering to make it interesting across the year. Their time to market is 12 months. Women only need nine," he joked.
The upper levels of the market "seem to be easier than ours. They live on dreams," though he acknowledged they "don't only dream but deliver great products, too. But I think the whole luxury offering is too far away."
What would that mean in practice? Krogner said talks with Prada regarding Jil Sander, were "going well, but then we pulled back. I had to organize my own succession at Esprit."
Indeed, Krogner said he would consider buying into the premium segment. "But I could also create my own brand, setting up in London, for example, and using the design talent there. This is not a final decision.
"We are looking upwards in order to give Esprit a better image and access to quality and design excellence. I want to force my people to think higher," he continued. "I believe that in the future, people won't consume more but better."
Esprit is considering the upper market segment, he reiterated, "not because of turnover, though of course I wouldn't want a nonfunctioning brand. It should be profitable. But this is not for the sake of growth. It's for the knowledge curve."
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye
"Nowadays when life is not so happy with everything going on in the world, I think people come to me for a little bit of whimsy and color and fun." - Designer Rebecca De Ravenel on her cult-favorite jewelry line. (📸 : @vsteves) #wwd40
“Everyone is talking about how the retail industry is struggling, but I think it’s an incredible time because brands who are doing something different and innovative are setting themselves up for the future,” said @adamgoldston, who founded the luxury athletic brand @apl with his brother @ryangoldsten. The Goldston’s are part of WWD’s 40 under 40: a group of industry notables. See the rest of the list on WWD.com. (📷: @vsteves) #wwd40
@eyeswoon blogger Athena Calderone debuted her first-ever cookbook, “Cook Beautiful,” which is heavily centered on the presentation and visual expression of food. Pictured here are her miso glazed carrots from the book. Get the recipe on WWD.com. (📷: @johnny_miller_) #wwdeye
“It’s passion that helps get anybody to a certain point and it’s what’s propelled me,” said Kith founder @ronniefieg, one of WWD’s 40 under 40: a group of industry notables who are changing the face of retail, fashion and beauty. Fieg, who opened a Manhattan flagship on October 7, began his career at age 13 as a stock boy and salesman for footwear chain David Z. “I think staying true to [my] beliefs, hard work and passion have gotten me to where [Kith] is today.” See the rest of the 40 at WWD.com. (📷: @vsteves) #wwd40
25-year-old @samweaving is about to break out this fall, starring in Netflix’s horror film “The Babysitter,” fittingly out today on Friday the 13th. That’s not the only place you’ll be seeing her, though — Weaving’s got a role Showtime’s “SMILF” and another alongside Frances McDormand and Woody Harrelson in “Three Billboards Outside Ebbing, Missouri.” Though she’s got a full plate at the moment, there’s one role she’s got her eye on: Marilyn Monroe. “I’m a little too young at the moment, but it’s on my bucket list,” the actress told WWD (📷: @dandoperalski) #wwdeye
BFF's Poppy Jamie and Suki Waterhouse celebrated the launch of their bag line Pop x Suki at Nordstrom last night. "The line is really about our friendship, and how we are so different but complement each other," said Waterhouse. 👯 (📷: Katie Jones) #wwdeye
After designing the new @louisvuitton and @bulgariofficial flagships and a @chanelofficial boutique opening in Japan, @petermarinoarchitect has another project on his plate: The Lobster Club. Located in the Seagram Building, it’s the famed architect’s first restaurant project in New York, serving up modern Japanese brasserie-style cuisine. Bronze hues, bespoke material detailing, blush and chartreuse tones and a heavy emphasis on Picasso can be seen throughout. Mark your calendars for Nov. 1 for the much-anticipated opening. (📷: @clint_spaulding) #wwdeye