Fashion retailer Esprit, which recently said it had “lost its soul” as it lost customers to rivals such as H&M and Zara, has hired a former Zara manager to turn its fortunes around.
Jose Manuel Martinez, a 42-year-old Spaniard and former manager of Inditex, the world’s leading fashion retailer which owns the Zara brand, is to take over as Esprit’s new chief executive replacing Ronald van der Vis, who quit in June.
The announcement sent Esprit shares, which are listed on the Hong Kong stock exchange, soaring by as much as 28 percent.
However, analysts warned investors against pinning their hopes too high.
“The appointment is positive, but it’s still only a first step,” said Deutsche Bank analyst Anne Ling (林建純).
Her colleagues at Bank of America-Merrill Lynch predicted that Martinez has a “long and bumpy road” ahead of him.
Esprit is, indeed, not doing well.
Last year, its operating profit shrank to just 70 million euros (US$86 million) from close to 400 million euros a year earlier, owing to the cost of a 1.7 billion euro restructuring program which will weigh on profits again this year and next year.
At the same time, rivals Zara and H&M are continuing to grow.
On its Web site, Esprit boasts it is “an international youthful lifestyle brand offering smart, affordable luxury and bringing newness and style to life.”
It operates more than 800 directly managed retail stores in more than 40 countries worldwide.
However, outgoing CEO Ronald Van der Vis complained that the group has “gradually lost its soul in recent years.”
In its drive to expand internationally, the “brand’s heritage has been neglected and customers were no longer the center of attention,” he said.
Esprit is indeed a long way from its beginnings in 1968 when its founders, hippies Douglas and Susie Tompkins — who also set up the North Face brand — sold their clothes from a VW camper van in California.
However, the Tompkins left long ago. And Esprit has been listed on the Hong Kong stock exchange since 1993, with its dual headquarters in Ratingen near Duesseldorf in Germany and in Hong Kong.
Sales have been in decline since mid-2008, with its fashion collections failing to capture customers’ imagination.
The departure of its main designer, the Korean-American Melody Harris-Jensbach, in January 2008 has not helped.
Ronald Van der Vis tried to turn the group around by launching a worldwide restructuring last year, including the closure of more than 170 unprofitable stores, notably in North America, Spain, Sweden and Denmark.
At the same time, Esprit is focusing its energies on its main European markets where it plans to open 185 new stores in Germany, Austria, Switzerland, France and the Benelux countries by 2015.
It is looking to rejuvenate its image with new concept stores.
Another part of its offensive will be China, its second national market after Germany, where the number of sales outlets will be increased to 1,900 by 2015 from around 1,000 at present.
DOLLAR CHALLENGE: BRICS countries’ growing share of global GDP threatens the US dollar’s dominance, which some member states seek to displace for world trade US president-elect Donald Trump on Saturday threatened 100 percent tariffs against a bloc of nine nations if they act to undermine the US dollar. His threat was directed at countries in the so-called BRICS alliance, which consists of Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Turkey, Azerbaijan and Malaysia have applied to become members and several other countries have expressed interest in joining. While the US dollar is by far the most-used currency in global business and has survived past challenges to its preeminence, members of the alliance and other developing nations say they are fed
LIMITED MEASURES: The proposed restrictions on Chinese chip exports are weaker than previously considered, following lobbying by major US firms, sources said US President Joe Biden’s administration is weighing additional curbs on sales of semiconductor equipment and artificial intelligence (AI) memory chips to China that would escalate the US crackdown on Beijing’s tech ambitions, but stop short of some stricter measures previously considered, said sources familiar with the matter. The restrictions could be unveiled as soon as next week, said the sources, who emphasized that the timing and contours of the rules have changed several times, and that nothing is final until they are published. The measures follow months of deliberations by US officials, negotiations with allies in Japan and the Netherlands, and
Qualcomm Inc’s interest in pursuing an acquisition of Intel Corp has cooled, people familiar with the matter said, upending what would have likely been one of the largest technology deals of all time. The complexities associated with acquiring all of Intel has made a deal less attractive to Qualcomm, said some of the people, asking not to be identified discussing confidential matters. It is always possible Qualcomm looks at pieces of Intel instead or rekindles its interest later, they added. Representatives for Qualcomm and Intel declined to comment. Qualcomm made a preliminary approach to Intel on a possible takeover, Bloomberg News and other media
Foxconn Technology Group (富士康科技集團) yesterday said it expects any impact of new tariffs from US president-elect Donald Trump to hit the company less than its rivals, citing its global manufacturing footprint. Young Liu (劉揚偉), chairman of the contract manufacturer and key Apple Inc supplier, told reporters after a forum in Taipei that it saw the primary impact of any fresh tariffs falling on its clients because its business model is based on contract manufacturing. “Clients may decide to shift production locations, but looking at Foxconn’s global footprint, we are ahead. As a result, the impact on us is likely smaller compared to