Hong Kong fashion retailer Esprit, now a global brand, will take its successful business model to the US

Esprit Holdings bucked the global economic downturn by posting a net profit of HK$927 million (US$120 million), an increase of 61 per cent year on year. Double-digit growth in its European sales has helped boost turnover, which increased for the ninth consecutive year.

At the end of 2001 the company acquired full ownership and management control of the Esprit marque worldwide. Having unified its brand globally, Esprit is now poised to put itself back on the map in the world's largest consumer market, the United States. 

In April Esprit entered distribution partnerships with leading US department stores Dillards and Macy's East and West divisions to sell its products in up to 270 outlets.

"We are already a global business, in which Hong Kong represents only about 12 per cent of sales," said executive director and chief financial officer John Poon Cho-ming.

The company's location in Hong Kong is part of the secret to its success, Mr Poon added. Sourcing plays an important role especially in the current highly competitive retail environment. About 50 per cent of products sold in Europe are sourced from the Asia-Pacific region.

"Lowering our costs of goods and shortening delivery cycles without sacrificing quality are essential in sustaining our profitability. Our close ties with our supplier network of over 330 manufacturers throughout the Asia-Pacific and Europe enable us to fulfill quick injection orders for the best selling items."

Hong Kong's proximity to the Chinese mainland is also crucial as Esprit's operations there along with those in the US will become the main motors of its future growth, according to Mr Poon.

"Our best performance in Asia is in China, where our sales growth was 20 per cent last year," said Chhibber Surinder, the executive director responsible for Esprit's Asian operations.

Five hundred of the company's 600 outlets in the mainland are franchised stores. The remainder are operated in joint venture with mainland company China Resources.

Esprit 's main strategy is to rely on wholesale operations, marketing its products through major department stores, specialty outlets and franchised stores. It hopes to use this formula that has proved so successful in Europe and China in North America too. 

Related links:
Esprit Holdings www.esprit.com
Dillards www.dillards.com
Macy www.macys.com