Fashion Brand Esprit Shanghai Flagship Store Closes Up Difficult Enemy Rents Rise

Recently, located

The Esprit flagship store of CITIC Pacific Plaza quietly closed down again, triggering a heated debate in the industry.

In the past ten years, the large flagship store, which opened at that time, is now on the decline.

The industry believes that the continuous aging of the brand led to poor business performance, Esprit has been inconsistent with CITIC Pacific square and the location of its business district.

Its deteriorating performance is difficult to bear the "booming" rent of the lot.

Brand aging and scale expansion can not match the supply chain management capability and rely too much on the single market, which has suppressed the subsequent development of the brand.

Esprit (trademark holder is global) is fading away from its original success.

Rent increases and pressure performance

In the same floor

Shop staff recently introduced that the Esprit had not been renewed due to the expiration of the rent, and the shops had been evacuated at the end of July.

A staff member of CITIC Pacific Shopping Center revealed that the senior managers of the shopping center had recently been replaced, and the new leader would lead the shopping mall to a more high-end direction.

The future positioning of Esprit brand and shopping malls is out of line.

It is reported that CITIC Pacific Esprit flagship store operates its brand on the one or two floor.

And so on, covering an area of more than 1000 square meters, and part of the third floor is hair salon with the same brand.

For the reasons for the closure of the store, many times contacted Esprit brand Hong Kong listed companies.

The industry believes that the Esprit withdrawal, mainly because of its deteriorating performance is difficult to bear lots of "booming" rents.

Its parent company's global profitability declined for three consecutive years, which had a significant impact on the Esprit brand.

The latest quarterly report released by the company for the fiscal year ended March 31, 2012 shows that sales in Europe, Asia Pacific and North America decreased by 7.8%, 5% and 5.8%, respectively, compared with Hong Kong dollars, and the wholesale sales of the company also fell 13.3% over the same period last year.

Qi Xiaozhai, chief investigator of Shanghai commercial information center, pointed out yesterday: "when Esprit entered, the high-end brand of shopping malls in the whole business circle had not yet been fully introduced."

With the continuous adjustment of the following, many non high-end products can be changed to high-level or new sites.

Subsequently, the positioning of shopping malls continued to rise, and store rentals also rose.

CITIC Tai Fu related people have revealed that the cooperation between the two sides has not ended.

CITIC Pacific in North Sichuan Road project Shen Hong square will continue to introduce Esprit, and the commercial project will officially open at the end of September.

Qi Xiaozhai said that the location of North Sichuan Road business circle was dominated by the masses, because the new lease would not be so high.

Embarrassment of brand positioning

Insiders pointed out that as the earliest fashion brand to enter the Chinese market, Esprit was once the object of pursuit for young people.

However, after UNIQLO, ZARA, Gap and others have been competing for Chinese market with speed and fashion,

The style has not changed for ten years, and the brand aging is serious.

Orient Securities research report pointed out that compared to Esprit, ZARA is more fashionable and H&M product line is richer, and UNIQLO's basic cost performance is even higher.

"Unable to keep up with the popularity and falling prices," said Ma Gang, an independent critic of the clothing industry. Esprit now has an awkward position.

Xue Shengwen believes that the instability of Esprit management has also brought great difficulties to the management of the company.

"Esprit, once the core competitiveness of innovation, is gradually losing its creativity."

Since last year, Si Jie globe has suffered many shareholders' reduction because of its sluggish performance.

In November last year, BlackRock reduced its stake to 38 million 800 thousand shares, valued at HK $417 million, and the latest shareholdings dropped to 2.16%. JP Morgan held 1 million 810 thousand shares in June this year, and its rights and interests decreased from 6.02% to 5.88%.

In August, the MarathonAssetManagement was reduced by 955 thousand and 700 shares at HK $9.429 per share.

Investment banks including Merrill Lynch and HSBC have also given SG global ratings.

Faced with strong competitors, serious customer churn and sluggish business performance, in August, Si Jie global hired Zara former executives to take over as CEO.

In this regard, industry analysts warn investors not to place too much hope. The appointment is positive, but that is still the first step.

"The reform will not see the effect for the time being."

Zheng Mingxun, former vice chairman of Si Jie, said earlier that in order to cater for the market, Si Jie will also be pformed into a fast consumption clothing brand.

Independent fashion commentator Ma Gang believes that after the pformation of Esprit, there are many problems that need to be faced.

"Just adjusting the other side is not enough. We need to make a clear judgement of the market as a whole. If the giants are squeezing, does the market have a big expectation?"

The above industry analysts believe that the popular things are easily subject to external interference. Whether Esprit is going to light the luxury market or the fast fashion market needs careful consideration.

"It's harder to get into the operation."