Esprit CEO José Manuel Martinez Gutiérrez has announced a new brand to start in 2014. Along with that announcement, he said he expects the group to become profitable “probably even next year”.
Little brother for Esprit
CEO José Manuel Martínez Gutiérrez put his cards on the table in the Sunday edition of the Frankfurter Allgemeine Zeitung, a German paper. He announced the launch of a new brand, “possible in the first half of next year”.
It will position itself as a slightly younger and cheaper brand compared to Esprit, similar to Esprit’s second brand edc. “We are treating the brand like a start-up, with a few own stores so that we can keep the costs under control. We will try out the new concept in our core countries: Germany, Austria and the Benelux”, the Spanish CEO stated.
Esprit still held the fourth fashion position worldwide in 2008, trailing Gap, H&M and Zara. Since then however, turnover has dropped twenty percent and shares are at an all-time low. “It is a dramatic development, especially seeing how costs have gone up a fifth in that same period”, the CEO admitted. Last March marked the first loss in twenty years, after turnover had dropped once again.
"It is our job to turn the tide. The most recent quarterly results show a slight course correction”, José Manuel Martínez Gutiérrez remains hopefully. The first half of 2013 saw turnover drop 5.1 %, but Esprit believes it can limit the drop in the second half of the fiscal year to 1.6 %.
Next step is growth, “possibly within two to three years”, Gutiérrez believes. He is also convinced he will get the time to develop: “Financially speaking, we will definitely get there. We have managed to get our costs under control and a capital injection gave us enough resources to make Esprit successful again. I am counting on becoming profitable soon, possibly next year. That was not something we could envision last year.”
(Translated by Gary Peeters)