For several seasons Esprit has been busy rebuilding its brand, but it's investors remain unimpressed. Marketing is second nature to most high street brands, but a brand's essence should be about its product. Perhaps that is were Hong Kong-based Esprit is getting it wrong. Keeping consumer interest embodies so much more than just advertising. At the end of the day a high street brand like Esprit must have product that is relevant and unique.
It appears Esprit's customers are not finding their products so relevant and unique these days, as in technical terms, Esprit is under-performing, i.e. it is not selling enough.
"The market had too much hope and too high hope on the performance," Alex Wong, director at Hong Kong-based brokerage Ample Finance Group, told Reuters.
Esprit closed US stores amid losses
Martinez, the former executive at rival retailer Zara who joined almost a year ago, has so far closed Esprit’s North American operations and closed 16 stores, mainly in Europe, while maintaining its focus on China.
Esprit has also been working to reduce lead time in its supply chain so that clothes hit stores within two to three months of manufacturing instead of six to nine months. It also scaled back its marketing and advertising costs by 30.7 percent, and its staff costs by 3.4 percent.
"It is important to understand that the problems with the company are quite structural," Martinez said, noting Esprit's strategy would centre on improving product desirability.
"Our number one priority is product,” he stressed, adding: “We really should focus now on performance itself and we shouldn't expect to have any more exceptional provisions.”
A quick browse of the Esprit collections online identifies why the company doesn't have the same appeal as Zara, Topshop or Cos. It's accessories are lacklustre and unconvincing. A frumpy pencil skirt is the image to sell New Arrivals and in the looks of its new fall collection fails to capture the fashion zeitgeist, even when modeled on Erin Wasson.