Spirit of Esprit

Published: 17 January, 2007

Global lifestyle retailer Esprit has come a long way since its humble beginnings in 1968 when San Francisco couple Susie and Doug Tompkins were selling clothes out the back of their station wagon.

Its first retail store opened in 1976 in Cologne, Germany, but these days the brand Esprit is sold in 44 countries over five continents, with 670 own retail stores and 950 franchise stores worldwide.

Wholesale distribution is a big part of the business - in fact 57.6 per cent of the group's total turnover is wholesale business. In the UK, wholesale distribution channels include 12 franchise stores and 100 store-in-stores/identity corners.

There are also currently nine directly managed stores in Britain and Ireland over a total selling area of nearly 64,583 sq ft - which is an increase of 29.7 per cent on last year. The most recent opening was in Letterkenny on November 30, and further expansion is planned.

Henning Gerbaulet, wholesale manager Europe, says: "Mainly we are targeting within retail the main cities in the main high street locations. We currently have two stores in Oxford Street and one in Regent Street, and this is something we would like to see in other cities outside of London.

"We also want to extend our franchise partner stores within the smaller-to-medium-sized cities."

Gerbaulet is unable to reveal the extent of the expansion plans in the UK, but globally plans are to invest £44m for the opening and extension of over 80 directly managed stores, of which more than 35 will be in Europe.

So what is Esprit looking for? The size of the store really depends on the location. Commonly, the directly managed stores are between 6,500 to 8,500 sq ft, while 2,500 to 3,000 sq ft is the ideal size for the franchises.

"There is no difference between our stores and the franchise stores except the size," says Gerbaulet. "The look, in terms of the store and product, is absolutely the same. The stores in the main high streets in large city locations we run ourselves because the investment is heavier than in the medium-sized stores, where a local partner with local and real estate knowledge and a customer base can operate better."

Esprit also recognises that there are vast opportunities for long-term growth across the group in many untapped markets, though the company has yet to expand on these plans.

The company, which is marketed as an international youthful lifestyle brand offering smart and affordable luxury ranges, bringing newness and style to the life of its customers, positions itself between vertical high street brands such as Next and H&M and the designer labels.

"We are in between in terms of price with better quality and approach," explains Gerbaulet. "We're a lifestyle company, so we're not only doing women's wear but a complete offer of men's, women's, children's, sports, accessories and shoes."

He is very proud of the fact that lines are always being refreshed on a monthly basis so there's always something new for customers to buy.

"We're a fast growing brand in the UK market," says Gerbaulet. "We see very good results from retail and wholesale and we see a huge potential to open new stores and new formats on the UK high street."

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=== Statistics ===

esprit

Number of UK directly managed stores: 9

Number of UK and Ireland franchises: 12

Number of UK store-in-stores and identity corners: 100

Group total turnover (year to 30 June 2006): £1.5bn (up 18.2%)

Group operating profit (year to 30 June 2006): £323.7m

Total UK selling space (directly managed stores): 64,583 sq ft

Total UK selling space (franchise stores): 19,762 sq ft

Total UK selling space (concessions): 21,118 sq ft

Average size of directly managed stores: 6,500 to 8,500 sq ft