Stores

Esprit’s coming back to the US, but the brand faces unique challenges

Will it strike a connection with its new set of Gen Z consumers?
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Dennis Diatel Photography/Getty Images

· 3 min read

Get ready for a loaded dose of nostalgia: The beloved (once) California-native brand Esprit is all set to make a comeback in North America after stores closed a decade ago. Cue the ’90s trends.

The return is part of Esprit’s larger comeback strategy that kicked off with its Hong Kong-headquartered brand reopening stores across Asia earlier this year. For its American relaunch, the retailer is starting off with a colorful pop-up in Los Angeles that opened November 16, while a permanent store is on the books for early next year.

Esprit CEO William Pak told WWD that the company chose LA because it was, at its inception in 1968, a “California brand” before shuttering its 93 stores in 2012. Since last year, Esprit has focused on developing a revamped brand identity focused on sustainability and targeting Gen Z consumers with fresh styles. But with the current economic climate and shifting consumer shopping habits, the question remains: Can it succeed this time around?

“We’re coming out of Covid, where there’s been an extreme casualization of the workplace,” Nora Kleinewillinghoefer, associate partner in Kearney’s consumer practice, told Retail Brew, adding that China and the US are currently Esprit’s biggest markets, which should work in the brand’s favor. “It was tough to pull out of the US, so for them to have sustained growth now that they figured out their profitability model a little bit better, it’s a good opportunity to use the two biggest markets as expansion opportunities.”

Trial and error: While the brand’s Asian expansion strategy focuses on strengthening its e-commerce channels, the physical store seems to be the bigger focus in the US.

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Kleinewillinghoefer believes that while pop-ups might be a good way to get a feel for the market and consumer sentiment, a largely store-led strategy might not be the best idea as “brick and mortar is still very much in flux,” she said. “Brands need to be very strategic and deliberate about how they use store locations versus how much they use their e-commerce channel to really connect to the consumer…I’m not sure that the broad retail strategy for physical stores is going to be safe; I think there’s certainly a need to do a lot of testing on that before they go down that road.”

Take two: Along with testing the in-store versus e-comm strategy, the retailer also has to work hard to establish its presence with Gen Z, its current target consumer group, which, per Kleinewillinghoefer, “essentially doesn’t remember” the brand’s existence before now. “That oldest Gen Z consumer was about 10 years old when Esprit left North America,” she said. “So you have a whole consumer segment to whom this is actually, for all intents and purposes, a new brand. They have a pretty strong credibility gap to breach, where they’re coming in as essentially a new brand.

”However, the retailer does stand a chance to succeed provided it shows its new target consumers it’s relevant to them. “They have a lot of equity around retro, [which] is really popular right now,” Kleinewillinghoefer explained. “The casualization of the workforce—that’s been a really powerful tailwind for a lot of brands. And they have an opportunity to capitalize on that if they’re being smart about how they’re approaching the consumer.”—JS

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