Esprit struggles in US amidst resignations

Fashion chain Esprit is faced with difficult times, specifically in its US operations. Key department stores have discontinued sale of the brand, a number of licensing agreements have been put on hold and the brand will stop US distribution of Collection women's suits and career apparel, as well as the entire men's wear line. Furthermore, three executives have recently resigned. Carmine Porcelli, director of Esprit US, Jack Schwefel, executive vice president of North American retail, and Derong Yang, global image director.

Having recently reintroduced the brand in the US after an absence of 15 years, Esprit is facing up to the fact that brand recognition is not what it used to be and changes have to be made. Projected sales are momentarily 30 to 75 percent lower than had been anticipated, a source told WWD. The same source also said that roughly 20 Esprit employees based in the US would be layed off this week. This claim was, however, denied by president of Esprit North America, Andreas Adenauer.

Adenauer said that the company is learning what works in the US and what does not, and is involved in a structural reorganisation which will allow it to build brand recognition in the US.

"Some of our retail stores are underplanned," said Adenauer. "We overdid the division mix from baby to sport in both women's and men's. We overstretched the consumer. But we're learning and we're going on, not aggressively, but wisely. We are definitely perceived as a brand here, and we're well-known, but we're not a destination. We have to focus on triple-A locations in the future, like our shop in SoHo or the Garden State Plaza Mall. At these locations, we can build the brand and go from there."

At this moment, Nordstrom is the only major store to carry Esprit. Dillard's, Macy's East, Macy's West and Marshall Field's have all received their last wholesale shipments. Adenauer maintains that the decision to wholesale solely to Nordstrom's is a "win-win" situation for both the brand and the specialty store. "Nordstrom is really taking care of our brand and our image. It's like a marriage and we want to strengthen it and support it. It's a success story," he said.