Byline: Alice Welsh

NEW YORK — After a dizzying slide, Esprit de Corp. is finally seeing a significant turnaround.
“For our 1995 fiscal year, which began July 1, 1994, we are anticipating a $120 million volume in junior apparel,” said Andrew Cohen, president of Esprit Wholesale. “That’s about a 70 percent increase from 1994.” The junior division had been moving downhill since fiscal 1991, when it shipped $220 million worth of merchandise. The figures for the subsequent years were $200 million in ’92, $135 million in ’93 and $70 million in ’94.
“We had a magical name, but we bungled the business so badly it was appropriate for some people to leave,” Cohen said. “Today, we are selling every major department store in the U.S.”
Cohen said the company went from 2,500 to 1,100 doors from January 1992 to September 1993.
Spring 1995 bookings were 35 percent ahead of last year’s, said Cohen.
“If the brand continues to perform, I think we can increase our volume by another 30 percent in [fiscal] 1996,” said Cohen.
“The doors we lost came back relatively quickly,” said Barry Bates, Esprit’s senior vice president of sales here. Before Bates joined Esprit in January 1994, the company had no senior executives based in the New York office.
“People were waiting in the wings for the product to turn around because the name was still strong,” said Bates. “The product started performing, but we had to give a lot of markdowns to keep the level of business in some stores. We were a propped-up business.”
The company began restructuring its business in 1993 by lowering prices, streamlining management, consolidating sourcing among the divisions, hiring a new designer and reducing product offerings.
Its redirection was evident in spring 1994 when designer Claire Ortiz’s products first hit the stores.
“We made a lot of progress from February 1994 to July 1994,” said Cohen. Ortiz, who was previously director of product for BWS Brands, a Los Angeles maker of junior, young men’s and children’s sportswear, joined Esprit in November 1993.
“Since Claire arrived, we have really picked up on street fashion,” said Cohen. “Claire is really on the trends. She was right there with short skirts, mohair and alpaca, denim shortalls and overalls.”
“I attribute [the turnaround] to a much more focused presentation to retailers during this time period and to Claire’s designs,” Cohen continued. “In the past, we would typically offer 900 to 1,000 styles, but we changed that and ultimately went to 300 to 400 styles.
“We focused on some core products that retailers could actually buy and buy again — like embroidered T-shirts, logo T-shirts, fashion denim shorts and knit tops.
“The days of the big collection business in juniors are really over,” said Cohen. “We are focusing more on classifications of related separates that work together, and then on hot items within each classification.”
Cohen noted that Susie Tompkins, founder, an owner and a member of the board of Esprit, was responsible for bringing in the new management team, headed by David Folkman, president and chief executive officer of Esprit. “Susie was very much a part of the changes at the company,” said Cohen. “She is an inspiration to everyone and really responsible for driving the global image of the company.”
Tompkins continues to design her own signature collection under the Susie Tompkins label.
Retailers say they are happy with the changes, attributing the turnaround to the new management team, more attention to fashion and lower prices. While most retailers never stopped carrying the line completely, they did cut its distribution dramatically.
At Younkers, based in Des Moines, Iowa, distribution was sliced from about 50 doors to as low as eight doors by 1993, according to John Parros, senior vice president and general merchandise manager.
“[Esprit] came back dramatically this year. They worked very hard to bring a quality fashion product to the market at a fair price. They have targeted the junior customer and are on top of the trends,” said Parros.
Younkers started restoring doors in spring 1994, increasing the number to 15, then 20 for fall 1994. By yearend, key items were distributed to all 53 doors. Distribution to all doors will continue for spring and summer of this year.
“We’ve had tremendous success with the line and look for it to continue as one of the best performers in our whole junior complex,” said Parros. “We are planning aggressively for spring and summer.”
Dillard Department Stores never stopped carrying Esprit, but eventually cut the number of its doors in half.
“When things started falling apart, we became more focused with the product and keyed it to stores in certain suburban divisions,” said a spokesman for the company. “It was progressive. The product wasn’t selling, and the prices were too high, but the number one thing was the product — the styling, the color direction, the whole mix was off.
“Esprit was the dominant junior resource out there in the Eighties. It started slipping in ’89 or ’90 when it developed a crack in the boat. It really started crashing in ’92 and ’93.”
Dillard’s credits the new management team for much of the success.
“With Barry and Andy involved, we have seen a lot of improvement at retail in the item and logo business. They are focused back on what they used to be good at — doing fashion basics. “We are still in a building process with the business. Our business is up at least 25 percent over last year. Each season we think is getting better and better. Fall was pretty good, and spring should continue to be good.”
Mercantile Stores Co. cited Esprit’s focus on key classifications and items as critical to its turnaround.
“They are on the right trends with excellent planning and merchandising and good management. It’s a formula that works,” said Paul McLynch, vice president and general merchandise manager of juniors.
Mercantile had cut back its distribution, but now the line is back in all doors.
At least one, Burdines, stopped doing business with Esprit altogether about two years ago.
“We continued to shop the line, and when we saw the turnaround, we decided to test it for spring 1994 in select stores,” said Rob Smith, divisional merchandise manager for juniors. “For fall 1994, we raised it to 17 doors and went to 27 this spring. We will monitor sales and consider selling the line in all 42 doors for fall 1995.
“I think Claire Ortiz is very talented, and the fashion pieces are selling very well — better than basics.” Burdines just created an Esprit in-store shop in its flagship for spring selling, said Smith.
Esprit still has some problems to solve, however.
“They have some work to do on deliveries,” said one retailer. “There were some delivery problems in the fall, but I think they are addressing the issues.
“By offering lower prices, they had to make changes, so some shipping difficulties resulted. Also, their business increased rather dramatically, so they had to get geared up to meet the demands,” he said.
Cohen acknowledged that they have some work to do on deliveries, but is confident they will be worked out soon.
“When you reinvent your sourcing, it takes time to flush out problems,” he said. “We are sourcing entirely differently than we have in the past, using 17 countries versus one: Hong Kong. We revamped our sourcing to maintain price-competitiveness in the market.”
A spokeswoman for the company said Esprit used to contract out its sourcing to the Esprit Far East division, but now all sourcing is managed from the San Francisco office.
Esprit’s management changes have also affected its related divisions: kids, accessories and footwear.
“The change in management enabled us to have a singular point of view,” said Cohen. “We eliminated the bureaucracy that in many cases forced us to operate independent businesses.
“Accessories, shoes — everything — should work with the junior clothes. Before there was very little coordination. Now there is a full, legitimate interaction between these divisions, and we are starting to see synergy among the products.”
As reported, Esprit’s licensed Dr. Seuss line for children was delivered exclusively to J.C. Penney and its own boutiques last December. Cohen expects a Dr. Seuss product for juniors for back-to-school 1995, but he said the distribution is still under review.
“We are anticipating $15 million in Dr. Seuss for the first year. It could grow to $40 million to $50 million within two years,” said Cohen.
Esprit has even more licensing plans. Esprit eyewear was launched in optical shops last fall, and watches are scheduled for back-to-school selling, said a spokeswoman.
Cohen said Esprit is working on licenses for jewelry, hosiery, perfume and socks.