The Hong Kong based fashion retailer Esprit Holdings has announced its intention to revise its US strategy, confessing that it had misjudged its popularity there. “I have overestimated our brand power in America ,” said chief executive Heinz Krogner. “Sixty percent of the women knew our brand, but they didn’t see any relevance. We have made mistakes.”
Although founded in the US in the 1960s, Esprit exited that market only to return to it a few years ago, spurred on by increased competition in Europe . It opened hundreds of concessions in department stores in the US , as well as a few retail outlets. However, US customers had long since lost familiarity with the brand. Poor locations of its outlet stores also contributed to a less than stellar performance.
Krogner said that from next year, the company would only sell casual and junior women’s wear and accessories in the US . He announced this plan after reporting a loss of approximately $15 million (£8.22 million) in the year ended 30 June. Wholesale contracts would be renegotiated and Esprit would only open outlet stores in prime locations on the “north-west corridor” between Boston and Washington .
The US failure had little impact, however, on the group’s overall performance. Due to significant growth in Europe and Germany especially, the company’s turnover soared 26 percent to $2.6 billion, while net profit leapt 67 percent to $425 million. German sales, which represent 48 percent of total sales, rose 21 percent, while the rest of Europe climbed 39 percent. Asia , which represents less than 10 percent of the group’s total sales, made a profit for the first time in years with a 21 percent increase in sales.
The Group has a target of approximately 20 percent sales growth for 2005/6. It intends to add at least 110 retail stores and 1,400 wholesale outlets globally this year. Esprit also said that its net profit margin had increased four percentage points, reaching a record 16.2 percent last year. It hopes to achieve 15 percent this year.
Click Here: Ireland Rugby Shop
Leave a Reply