Esprit Suffered Three Sluggish Pformation Sluggish Performance Decline

The interim results released by the Esprit brand Global Holdings Limited in February 23rd showed that net profit fell by 50.5% in the first half of fiscal year 2015 as of December 31, 2014, down from HK $95 million to HK $47 million in the same period last year.

At the same time, the number of stores is decreasing.

According to its first quarter earnings report, as of the end of September 2014, the group had a total of about 884 shops, a net decrease of 21 compared with the end of June, a net decrease of 109 throughout the year.

With the Esprit's nationwide closures, the fast fashion pioneer, once known by the industry as "the first department store's essential brand," is facing the risk of being marginalized by the market.

Some analysts believe that Esprit is no longer the preferred vision of brand investment, and its embarrassing brand positioning and high price are also keeping many consumers away.

Sharp decline in performance

In the first half of the fiscal year, the performance of many of its products was not satisfactory. Among them, the sales of Esprit women's wear, men's wear and its subsidiary brand EDC brand were down by 14.2%, 19.3% and 16.6% respectively.

Sales of other accessories such as accessories, children's clothing and so on have also declined.

Its turnover in the largest market in the Asia Pacific region, the Chinese market, has been reduced by 21.6%.

Esprit is the domestic fast fashion enlightenment brand, and it has opened stores in the mainland in 1992.

After years of expansion, the retail network has already spread to dozens of countries around the world, but the Chinese market has been occupying its third largest market in the world.

But since 2010, its global performance has begun to decline, and the performance of the Chinese market has begun to show signs of weakness.

Wang Qian, editor in chief of the first textile network, said that the experience of Esprit represented many of the fast fashion brands that had entered the Chinese market earlier.

"The clothing brands that are very beautiful in the department stores in the early days have disappeared in the large shopping centers."

Wang said that this is closely related to the changing environment of domestic consumption and the change of consumer habits. These old brand fast fashion brands, which are mainly based on store business, are facing repeated shocks from ZARA and other new fast fashion brands and e-commerce brands.

A senior garment industry, who does not want to be named, said that under the premise of diversified consumption choices, consumers' choice is no more than price and style.

In terms of price, Esprit has always insisted on the luxury brand positioning, but has been marginalized.

In terms of style, the product renewal rate that can only be completed in a few months has lagged far behind the update rhythm of H&M and ZARA.

In addition, another important factor affecting Esprit profits is the global financial environment.

Although the establishment and development of the Esprit brand has been closely linked to the Chinese market, its largest market in the world is in Europe, accounting for 50% of its sales in Germany.

The continued depreciation of the euro over the years has brought huge margins to the business model of "China's production and European sales".

From the peak to the trough, Esprit's pition is also related to the high level turbulence of Si Jie world.

The rise of Esprit is inextricably linked to the efforts of Xing Liyuan, a businessman in Hongkong.

Since he bought the brand from the founder of Esprit brand in 1996 and started the road of international development, Esprit has quickly become an international fast fashion brand.

The market value of the company also rose all the way, rising from 1 billion 500 million yuan to 66 billion when it took over, and increased 40 times in 12 years.

But when the company was at its best, Xing Liyuan, known as the "Godfather" of Esprit, began to withdraw.

In September 2006, he resigned as chairman of the board of directors of the company and became a non-executive director.

In January 2008, he resigned as a non-executive director and quit the management of the company.

Since then, Esprit has repeatedly changed management including CEO. Each executive has been ambitious when he comes to power, trying to make a big change, but the effect is not obvious.

In independence

Commentator Ma Gang seems that the high level of personnel shock makes the global positioning of Si Jie more and more obscure.

There is little effect on the multiple pformation of the world wide world, and every plan change in the high level makes the positioning of the world wide more blurred.

At the same time, there were no pilot projects before the implementation of the plan.

Aforementioned clothing industry veteran said that Xing Liyuan's departure made Esprit's mainland market go all the way, and began to appear sluggish.

Before and after 2008, great changes have taken place in the domestic garment industry. First, the new fast fashion brand ZARA and UNIQLO began to seize the market. After that, the rise of the electricity supplier brand led to the diversion of the market share.

Before the new market changes, Esprit almost did nothing, and gradually moved the market share and core stores to new brands.

Now, in the new market environment, what changes will Esprit make? The answer to this question may be related to the life and death of this old fashion.

In order to reverse the downward trend of performance, Si Jie global excavated Ma Haosi from September 2012 as the chief executive of ZARA's parent company Inditex group, and launched a new 3 year plan for ~2016 in 2014, including saving HK $1 billion a year, and reducing the operating expenditure to at least 50%.

For this reason, Si Jie global has shut down its stores in the Chinese market on a large scale, and resorted to measures such as shortening the shelf time of products.

In the industry view, the above changes can only be "throttling", but can not help Esprit out of the predicament.

Compared with ZARA, UNIQLO and other new fast fashion brands, Esprit can not achieve fast sales of stores, such as a product selling well or unmarketable, requiring store managers to quickly gather information and make decisions.

This puts forward higher requirements for the management and informationization of the store, which is difficult for Esprit to do at present.

Despite the update in style, Esprit has accelerated the cycle of product updates in recent years, but it still can not compare with the cutting-edge brand.

"For example, shortening the product renewal cycle to a week is a systemic problem, which requires coordination and coordination of the entire supply chain."

In the view of Wang Qian, it is not impossible for us to finish confrontation with ZARA and other styles in a hurry.

Wang said that on the way of wearing clothes to explore the electricity supplier mode, there were also some fumbling measures, such as a big promotion, which damaged the brand, but at least it was trying to change.

In contrast, Esprit faced difficulties and Uchi Naomi saw his determination and action to reverse the situation.