Esprit CEO William Pak on Global Makeover, Expansion in Amsterdam, London, New York, Los Angeles – WWD

William Pak is ready to help Esprit get its groove back. The Canadian lawyer could be an unconventional choice for the chief executive officer of the once iconic brand. He has spent years traveling around the world from San Francisco to New York and Hong Kong in private equity, working with technology and energy companies and fund management.

In short, he’s a numbers person – now tasked with bringing the brand into the black after a string of veteran fashion execs failed.

Founded in San Francisco in 1968, the company quickly expanded to Europe and Asia in the 1980s, becoming one of the most recognizable brands in the world. By diversifying into eyewear, housewares, accessories and watches, it built one of the first global lifestyle labels.

But for years it operated under fragmented leadership, shifting priorities and spreading geographic focus with competing offices in San Francisco, Hong Kong and Düsseldorf, Germany.

Over the last decade, Esprit brought in CEOs from Zara and then New Look to compete with the fast-fashion juggernauts, but the brand drifted as it closed most of its physical locations around the world — and the US and Left Britain , Australia and almost all of Europe. In 2020, the company closed all of its stores in Asia and went bankrupt in 2021 in Germany, its last major market.

“The company has lost its identity a lot over the last 10 years,” Pak told WWD.

Led by its largest shareholder, North Point Talent Ltd., the company moved its global headquarters to Hong Kong in July 2021. Pak joined the company in the midst of restructuring to stabilize the ship, initially in an operational role before taking over as CEO on March 1. The first year and a half was devoted to restructuring the company and providing financial support.

Not only has the brand lost its identity, but it has shed more than $1 billion since 2017 with the leadership change in 2021 before returning to profitability for the past two consecutive reporting periods.

“Now we stand on a solid basis. The company is debt-free and we have had a large cash pool of around EUR 350 million since the last financial year. That means we’ve aligned shareholder capital base with management for the first time in probably three decades. We are on the same page, have the same goals and have a capital base ready to invest in the future of the brand, not just save it.”

The move to Hong Kong makes sense, Pak said, as it consolidated the leadership team close to its investor base, where it will celebrate its 30th anniversary on the stock exchange with a splashy ceremony.

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“The company now has something different compared to other brands and competitors. There aren’t many brands out there without leverage,” he said, giving him optimism as the global economy faces the dual macroeconomic headwinds of recession and inflation. It’s part of a cyclical adjustment, he believes.

“A lot of companies need to step back and protect, but we can actually invest in the future… I want to make sure that we’re financially healthy, we can get out of this crisis and conquer the next boom.” If we are ready, we can expand and see growth once we get past this inflationary streak.”

Pak brought an all-new C-suite, including Chief Digital Marketing Officer Larry Luk, formerly of L’Oréal and Calvin Klein, and Chief Product Officer Sang Langill, formerly of Adidas and Calvin Klein. Tom Cawson, former creative director of Helmut Lang, also joined the team to lead design in New York and Amsterdam.

The company is now on a more solid financial footing and ready for a rebrand.

“Esprit means a number of different things to different people right now,” Pak said. For many, Esprit is less about the drab, mid-size mall brand it had become and more about the bright colors and distinctive, deconstructed logo of its ’80s heyday. There are Instagram fan accounts that are slavishly focused on finding old ads and curating those vintage items. Pak intends to capitalize on this seal of approval.

The team unearthed the long-abandoned archives in a warehouse in Germany. “It’s basically a treasure trove of Esprit history, so we’re incorporating a lot of that,” Pak said. He’s careful to clarify that the new look won’t be “gimmicks or just retro things,” but rather sleek and classy, ​​with touches of color.

‘Sweet Escape’, the new design team’s first collection, was launched on September 14th with sunny down vests, letterman jackets, denim trench coats and bright color blocking that’s on trend. The company has trimmed its calendar from 13 to four seasonal drops a year to avoid waste and excess inventory, Pak said.

The company will also introduce different segments at different price points with “Black Label” and “White Label” lines in the first quarter of 2023. Black Label will be priced higher with more expensive materials and designs, while White Label will be aimed at younger and more budget-conscious consumers.

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A diffusion line called Esprit Jeans, aimed at Gen Z and Alphas with trendier and more contemporary items, is also in the works and will launch in Asia in November.

Pak admitted that omnichannel is the buzzword of the moment as brands try to balance their booming online business with in-store sales, but said their business is being built from the ground up. “We actually have a very, very large R&D [research and development] Process currently underway to ensure it is truly omnichannel, both physically in our new stores and in our online universe that we are creating.

“Esprit hasn’t opened any new stores in over a decade and that’s a very exciting thing internally. We think we need a lot of new touchpoints,” he said.

The need to reinvent led to the creation of Esprit Futura, a hub system with bases in Amsterdam that will deal with infrastructure innovation and denim design; London, which will be an omnichannel-focused flagship, and New York, which will serve as a global creative hub.

London and New York will have physical stores where customers can interact with the brand, while Amsterdam will primarily be a hub for research and design. It will ditch its big-box style, and the new flagships will be “in the ballpark” of 10,000 square feet, while boutiques will take up about half of that.

If the Hong Kong headquarters and hub system that places diverse teams around the world seems counterintuitive after bringing management under one roof, Pak said it’s part of his plan to create a global esprit that depends on 24-hour innovation and collaboration.

The move to Hong Kong also positioned the company closer to its suppliers in China and across Southeast Asia. Pak said the company has slimmed down from more than 200 suppliers to just a handful. “We are very flexible in terms of the production location. As such, we are able to manage and adapt to various supply chain challenges that many brands have been facing, especially earlier this year. We got off to a good start because we have already diversified.”

Another strength will be sustainability, which is an integral part of Esprit’s ethos. The brand was already using organic cotton 30 years ago, which they learned by browsing the archives. “That hasn’t been the case for the last 15 years and it won’t be in the future,” he said.

“By shortening our supply chain, we have actually improved the quality of our materials. It’s much higher quality, but our margins are higher, so we don’t have an increasing per-unit cost that’s going to impact the brand. This allows us to give back to the customer what they liked so much about Esprit, because a long time ago it was about quality and we want to come back to that. We definitely want to decouple that from the current market perception.”

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Retail stores will take a global-local approach. The first independent company was opened in Seoul, South Korea, in June. It wasn’t a country where the brand had previously had a presence, so Pak was able to start with a clean slate and experiment with some of the new marketing concepts. They collaborated with Korean brand Rest & Recreation on a collection to coincide with the opening, the first in the model of locally designed and produced capsules that will be unique to each city.

A Los Angeles pop-up opening next week on South Robertson Boulevard will follow. “In the US, the first capsule is designed in Los Angeles for Los Angeles,” he said. It already has an office there, with plans for a permanent store in the first quarter of 2023, while its London and New York flagships are still recruiting.

However, don’t expect to see big celebs or guest designer stunts on the list. “Yes, we’re doing collaborations, but that’s not going to overwhelm the brand,” he said.

Pak declined to reveal what regional mix he expects for future business, but noted that e-commerce revenue has grown from 29 percent of sales in 2020 to 44 percent in 2021. With e-commerce relaunching in the US and Canada in October, Australia in the fourth quarter of this year and Europe in the first quarter of 2023, he sees sales becoming an “equal mix” between online and IRL.

If that all sounds like a lot, it is, Pak admitted.

“This could be the largest expansion in terms of global coordination ever undertaken by a retail brand. There aren’t many comparisons in terms of what we’re trying to do and it hits everything at once, both online and offline. I think we need to do that to give a coherent message to the consumer,” he said.

“We want to rush to position ourselves for the resulting growth and we’re finding a lot of people want us to rush as well, which means they want to come back to the brand and need a happy brand like Esprit.” ”

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