Yahoo Sports From California Cool to New York Nuanced, Esprit Rebuilds
In the pantheon of fashion brands, Esprit 20 years ago dropped in the rankings through management changes, reorganizations, product revamps, a withdrawal from the U.S., and a look that in America, at least, lost relevance.
Now there’s another reinvention underway, and it’s as sweeping as ever.
More from WWD
Debt has been wiped out, enabling the company to invest in upgrading information technology infrastructure and capabilities, retailing, and building a New York headquarters. Flagships on Fifth Avenue in Manhattan’s Flatiron neighborhood, Vancouver, Miami and Los Angeles are planned, marking a return to retailing in North America after 15 years. Stores will be rigged with omnichannel capabilities that utilize artificial intelligence, digital technology and real-time data to support operations and enrich the shopping experience.
Last February, a two-level, 38,000-square-foot New York headquarters for the global design, branding, creative and marketing teams, a showroom and a photo studio at 160 Varick Street in Manhattan started operating.
In addition, a new denim team was established at Esprit’s Amsterdam office, where the work focuses on improving fits, fabrics and washes. Esprit wants its jeans to coordinate with more silhouettes.
“In a sense, we are a start-up,” said Ana Andjelic, global chief brand officer, who joined Esprit in November 2022 after working at Banana Republic. “We don’t want to be prisoners of the past. I want to attach Esprit to current trends, building on a tradition of American style that started with Bonnie Cashin and lived on with iterations such as Donna Karan’s ‘seven easy pieces’ and Calvin Klein’s American minimalism.
“It’s a completely new brand positioning,” said Andjelic. “For legacy brands, you need to use the past as inspiration but also free yourself from the past. It’s an unbelievably tough balance.”
WWD met with Andjelic, along with Tom Cawson, Esprit’s senior vice president of design, at the new global headquarters, where they described how the Esprit collection is being overhauled, the new brand vision and marketing strategies, and previewed several fall ’23 styles. Both the collection and the staffing of the New York headquarters are works in progress, and critical to the brand’s future. Fall marks the first season where the impact of Andjelic and Cawson working together on the collection will be fully felt.
“It’s a big reveal for fall,” Andjelic said. “We started spending a lot of money on campaigns — a lot. We have to revive the brand.”
Last year was tough for Esprit. Revenue dropped 15 percent to 7.06 billion Hong Kong dollars, or about U.S. $918 million, compared to 8.32 billion Hong Kong dollars, or about $1.08 billion, the year before. There was an operating loss of 642 million Hong Kong dollars, versus operating profit of 416 million Hong Kong dollars. One Hong Kong dollar equals 13 cents at the current exchange rate.
The 2022 performance was blamed on inflation, higher energy prices and interest rates, currency volatility, and general economic challenges impacting consumer behavior.
“Esprit continues to have a firm financial footing with a healthy balance sheet,” William Pak, executive director, chief executive officer and chief operating officer, told WWD through an email, when asked what’s the outlook for the brand’s business in 2023. “This, combined with strong and dynamic leadership, an omnichannel strategy plan for growth, and a committed team, forms a solid platform on which to build towards a brighter and more successful future.”
Regarding a return to profitability, Pak didn’t specify any timetable, though in the past, he said he expects the company to rebound this year.
“Esprit remains focused on streamlining its operations and business processes while building upon the brand’s strong heritage,” Pak indicated, adding that the company has the agility to deal with “any unexpected challenges that may arise and resilience and readiness to adapt to changing circumstances.”
Pak listed major expenditures this year as the headquarters in New York, which is being designed by Gensler; new stores and pop-ups in North America, and “strengthening omnichannel-commerce capabilities…Core elements within the omnichannel strategy include stores that utilize artificial intelligence, digital technology, and real-time data to support retail operations and enrich the shopping experience. The omnchannel platform also includes a new loyalty program, gamification elements and hyper-personalized one-of-a-kind shopping experience that bridges offline and online seamlessly.”
In re-engineering Esprit, “the first step is to set the brand vision — maintaining the DNA of the brand, but advancing it to be current, and then you rebuild your organization to support the vision,” said Andjelic.
“So what are the core tenets of the Esprit look — versatility, oversized, masculine-feminine unisex, and layered, a lot of layering, and a lot of eclecticism, meaning the quality and fit is such that it’s easy to mix. It supports [wearing] Zara and it supports Prada. It supports luxury brands and it supports discount brands.
“It’s also very recognizable but we’re not locked into a look. Everyone knows streetwear, prep, Ivy League, workwear. We are gorpcore, a combination of outdoor and city, so it’s dressy pants with a cashmere sweater. It’s outdoorsy and metropolitan.”
The collection, Cawson said, “drives a look, but every element of the look can be worn in multiple ways and mixed with your favorite brands. The collection has a lot of room for customers to be playful with it.”
Within the collection, the executives cited eight hero or “signature” products: a multisystem parka, the “soft” suit, the tracksuit, soft skirts, logo-ed chunky knits, the button-down shirt, jeans, and the locker bag.
With revamping Esprit, the executives suggested the goal is not to revive its youthful California cool spirit and wildly bold prints, bright colors and baggy silhouettes that were so popular in the ’80s and ’90s. Instead, the brand aims to regain relevance with a more modern, urbane, practical approach and multigenerational appeal. The brand was founded in 1968 in San Francisco by Doug and Susie Tompkins with a West Coast sensibility. Now the sensibility has shifted to New York.
“The whole approach is very versatile,” said Andjelic, as she displayed a unisex lambskin parka that, with the belt and its removable hood and sleeves, can also be worn as a dress. Next, she showed a unisex men’s shirt that can be worn as a women’s dress, and then she pulled out a reversible quilted vest, in matte nylon on one side and recycled fleece on the other.
While sticking with the iconic Esprit logo, there are some modifications to the approach. Previously, the logo was primarily used to broadcast the brand. “Honestly, logos have been used to remind Gen X of what Esprit was in the ’80s,” said Cawson. “But from now on we are evolving the logo towards being an embellishment, an aesthetic rather than for brand messaging,” he added as he displayed a pull-up zipper with discreet three-bar tacks, referencing the Esprit logo, and the underside of a collar where the logo is even more discreet. “The use of the logo is very considerate,” said Cawson.
There’s also been significant changes in the denim program. Cawson, who for more than a year was consulting with Esprit before becoming a full-time employee in June 2022, put together a denim team at the company’s Amsterdam office. “Esprit didn’t really have any jeans expertise, but Tom and the team has been working to make each fit really perfect,” said Andjelic. The team is also involved in shooting a denim campaign utilizing “real people,” Andjelic said.
“Innovative use of material is also our direction,” she added, reaching for a cashmere-blend tracksuit with performance merino wool. “It’s sporty clothes that can worn as eveningwear.”
“We are moving to fabrics with more wool content and higher-grade cashmere,” added Cawson.
New marketing for the fall ’23 collection will launch in mid-August. Esprit offers four collections during the year, and within each season, two or three monthly drops. The bulk of the collection is priced $300 to $1,000, but some items are priced as low as $30.
“From Q2 going into Q3 we reduced the collection by about 40 percent,” said Cawson. “The huge thing was we had three separate labels, and there was a huge amount of repetition in product at very slightly different price points. One of the key things to reducing the collection size was to eliminate the EDC label, for more basic products and the White Label.” So starting fall ’23, all products are under one label, Esprit. “That has given us the freedom to really elevate quality,” Cawson said.
“Wholesale accounts would tell us that we need a label to put on an elevated floor, another label for a contemporary floor, or another label for a jeans floor. But that’s how brands get diluted,” Andjelic noted. She said it’s important to have “a static point of view, to know what the Esprit look is.”
On the wholesale side, Andjelic cited “a very aggressive reorganization” of the distribution. Most of Esprit’s wholesale distribution is in Europe. “That’s where we are looking to elevate,” Andjelic said. The current distribution in Europe is primarily with Galeries Lafayette and Printemps in France, Aachener in Germany, Stockmann in Finland, Rinascente in Italy, and El Corte Ingles in Spain.
“We are cutting off unprofitable doors or where the margins are razor-thin. We want better stores” to sell to, said Andjelic. Conversations with retailers in the U.S. are underway, though Andjelic declined to cite which ones. “We hired two wholesale people. It is a strategic priority,” she said.
“Most reinventions come with a celebrity; we are doing ground-up, meaning micro influencers who have a specific aesthetic, who are very engaged in their communities — those with no more than 100,000 followers,” Andjelic explained. There will also be events, and pop-ups will continue — two recently opened, in The Grove in Los Angeles and on Greene Street in the SoHo section of Manhattan.
While getting local, “We do need global campaigns to set our aesthetic, product and brand vision in motion,” Andjelic said. “We are going to have four seasonal campaigns plus one denim relaunch. Fall and holiday will be the biggest because the product is new…We have a full funnel media buy in key markets, including fashion publications, paid social, and digital media.” Still, she acknowledged, “It’s going to take a minute to build demand. Esprit was not in the U.S. for 15 years.”
In building the New York City organization, “We are on the fast track with hiring roles in our design, creative, marketing and brand departments,” Andjelic said. “In the creative department, just in the past two weeks, we added an editorial director, art director, and director of e-commerce studio…We are getting closer to hiring the global vice president of brand strategy. In the marketing function, in the past month, we made two key hires — global VP of brand engagement, in charge of commercial planning, email and loyalty programs, and senior director of marketing operations.
“We are rapidly growing as well in the product design department, having added five people in the past two months, and adding more. E-commerce, merchandising, retail and wholesale functions have already been established as well, with heads of the departments working on staffing their teams. We grew from three people in November to around 20 now, across functions, and many more will be coming in. We are hiring individuals who are very hands-on and that requires a unique set of talents.
“It seems like everything is happening at once.”
Looking ahead to 2024, Cawson said the collection and the messaging will evolve, quarter-to-quarter during the year.
“We are taking Esprit and the customer on a journey to what the new Esprit will be, and our approach is to use what happens on the journey as learning tools for ourselves, to learn very publicly what the new Esprit will look like. So we start in the first quarter really reflecting on the heritage of the brand, making everybody remember all the trends Esprit invented. As we move into summer, we start to look at how outside influences build on that narrative. Then we start to play on the idea of remixing things, remixing references. That gives us a tool box of new methods of designing. And finally as we go into winter, we use everything that we learned through the year to show the world what the new Esprit should look like. Having quarterly concepts is really storytelling, through product, through campaigns, through influencers and events.”
“We are taking risks, but they’re very considered,” said Andjelic.
Best of WWD
