The retailer posted a first-half loss of around US$60 million, compared with net profit of US$72 million a year earlier. Hit by the upheavals and gloom in the Eurozone—on which it relies for 80 per cent of its turnover, having pulled out of the US—Esprit is the sick man of the industry.
Campaign Asia-Pacific talked to a few branding experts in Hong Kong and Singapore to find out their view of the brand and the remedies it may take to save itself from going permanently out of fashion.
Benedict Gordon, managing director of The Brand Union in Hong Kong, said: "In a nutshell, Esprit is fast losing its esprit as a brand, and the company’s approach to marketing is pretty symbolic of this."
Instead, he suggested that rather than running a standard advertising campaign, it would have been a lot more interesting to see something like a Gisele-designed (or at least inspired) range—the kind of approach that has worked so well for the likes of Topshop and H&M, and something that the supermodel herself has done successfully for the C&A brand in the past.
"Gisele is most certainly a high-profile hire," said Akshay Mathur, associate director of brand consultancy Flamingo in Singapore. But he wondered if a trendy 16- to 20-year-old will be impressed by a supermodel who is glamorous and beautiful, but not necessarily cool or fun.
John Holton, co-founder and partner of Figtree Prophet, pointed out that people enjoy talking about things that are cool and contemporary.
"They need to be more innovative in their products, instead of following who sells what and then copying those items," he stressed. "Then they become a follower and not leader."
Holton cited Topshop, which is set to open its first store in Hong Kong's Central district in May, as an example. "They really know what it's about: Quick for turning things from catwalks to consumers' hands, being at the moment with a dash of Britpop edge to it."
He pointed to Burberry as another example of successful brand rejuvenation. Burberry used to be a classic yet somewhat old-fashioned brand. But when Angela Ahrendts joined the company as CEO in January 2006, with Christopher Bailey as chief creative officer, she turned the brand around from the 1950s and '60s to the 21st century. Still very British, Burberry is also cool, edgy and contemporary, a status it gained in part by working with young British designers.
Mathur echoed Holton's view and added that the high-street fashion category embodied values that revolve around dynamism, excitement and newness.
He said that the fact that they don’t have their own manufacturing facilities means they can’t introduce hot new pieces within any one season. So when pitted against the likes of Zara and H&M, Esprit’s collections often appear outdated and struggle to attract the young fashion-conscious shoppers Esprit so desperately wants.
Holton attributed the success of competitors like Uniqlo and Zara in part to distinctive Japanese quirkiness and Spanish flair, respectively. Esprit must put the soul back into the business, he said. "Localisation and originality are very important to a brand—who makes the brand, what the brand stands for, what is its brand essence and philosophy? They will die unless they say something specific. No amount of ad dollars is going to make any difference."
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