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After spending the past five years undertaking a massive restructuring program and a revamp of its product strategy, Esprit is finally starting to see some signs of progress. In August, it clocked its second consecutive profitable half-year, and in November, it appointed former Banana Republic chief brand officer Ana Andjelic to lead its global creative and design hub in New York. “Last year, we had our first net income in six years. The reason for that is partly due to what we are doing
doing here. In order to have a proper business transformation, we didn’t want to do it in a piecemeal fashion, we’ve taken a holistic approach,” William Pak, CEO of Esprit, told Inside Retail.
William Pak, CEO of Esprit
There have been many unsuccessful attempts to correct Esprit’s steady decline over the last 15 years, which is why Pak and the rest of the management team felt a complete overhaul was required.
“We started with changing our entire supply chain. We focused on the quality first. A lot of people remember the brand’s heyday in the 80s and 90s, and they still have a memory of when they bought our products and the good times associated with it,” he said.
Pak admitted that the feel-good factor had been lost along the way, so fixing the supply chain was the first step in getting the brand back on track.
“From over 200 vendors, we reduced it to just over a dozen, and these were high quality vendors in Asia across the board. The ability to do this was much better achieved by being headquartered administratively in Hong Kong,” he said.
Hong Kong is now home to the company’s sourcing, supply chain management, legal operations and financial operations, while its creative team will soon be based in New York.
“This year, we decided as part of this transformation plan, that the brand will move to New York City. It will be the brand’s headquarters, where all the creative work in terms of content, product design and imagery will be carried out,” he said.
According to Pak, it’s important for Esprit to become part of the fabric of the fashion world, its consumers and vendors.
Getting its groove back
Meanwhile, Esprit is ramping up its global expansion.
“Last week, I was in Los Angeles, to launch the first physical store in America over the last 10 years. It’s a pop-up that we launched close to Beverly Hills. We showcased a kind of California cool vintage varsity concept,” Pak said.
The pop-up is right across the street from a permanent store that Esprit will be opening in Los Angeles in the first quarter of 2023. This will be followed by another pop-up in Soho in New York in December.
There will also be pop-ups in Toronto in the first quarter of next year, followed by the opening of a permanent store in New York, set to coincide with the opening of a global flagship store in London.
“This is all part of the move back to being a global company. New York being the creative hub, London being the consumer experience innovation centre. So, we’ll be having all sorts of interesting activations in this London space,” Pak said.
The London store is not going to be just a regular store, as the company is working on a comprehensive omnichannel experience.
“It’s going to be in Mayfair, opening hopefully in the third quarter of next year, which coincides with our total rebranding. Meanwhile, in Amsterdam, we’ve got our denim innovation centre and technology centre. So, that’s our move back to the world,” he said.
In parallel, the brand has also been launching e-commerce sites around the world, and it just launched its Australian online store. According to Pak, Australia is a key market for the brand.
“Australia is a key market for us. A lot of brand equity is here. Apart from that, Canada, the UK and the rest of APAC is also hugely important, so it’s a big push from us so far,” he said.
Pak pointed out that Esprit has a long history and legacy as a global brand.
“The Esprit brand was originally from California. It moved to Hong Kong in 1971 and then to Germany in 1975. It grew big in these areas, changing over the decades, and in the last decade, it became more of a German company,” he noted.
Now, he believes it’s time for the brand to go global again.
A rich legacy
The rebrand will involve a total redesign of Esprit’s clothing and accessories lineup, beginning with its Fall 2023 collection.
Going forward, the company will have seasonal collections – Spring, Summer, Fall and Winter – and they will be a lot more curated than they have been in the past. They will also be more tailored to local markets, with different collections across Asia, the US and Europe.
“It’s going to be along the lines of modern contemporary clothing. It will be metropolitan outdoor fashion,” Pak said. “What it means is that it will be comfortably chic and elevated casual. We’re going to be creating a new feel for the brand going forward.”
The brand aims to gradually reflect this new aesthetic in its creative and branding imagery.
“With a focus on over 20 markets, our Esprit social universe is going online as well, [and] this will tie in to our physical spaces too,” he said. “This is tailored to Gen Z and millennials, and it’s all part of our overall plan.”
Pak’s vision is to offer timeless classics that can be incorporated into capsule collections that will resonate with customers across a broad spectrum.
For the first time, in a long time, Pak revealed that the management is 100 per cent aligned with shareholders. There is no bad debt, and there is cash to spend, so the company can invest in next year’s rollout and take advantage of growth opportunities as they come up.
“There are worries about an impending recession, but we think it’s more cyclical than systemic, due to artificial disruptions to the oil supply chain and pandemic-related hangovers. We feel positive to be positioned for growth next year,” he said.
Pak noted that Esprit still has many longtime fans, as well as new fans of the brand who have an affinity for what it used to stand for.
“There’s so much love for the brand that transcends fashion, it’s more about the lifestyle and attitude that we want to bring back and create. That’s why we’re doing this rebranding effort,” he said.
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