In what’s hardly a surprise, Esprit is liquidating in the U.S. after undergoing downsizings earlier this year.
Esprit U.S. Retail Inc. and Esprit U.S. Distributions both filed Chapter 7 petitions for liquidation with U.S. Bankruptcy Court in New York’s Southern District.
The business wracked up more than $3 million in liabilities and its 38,000-square-foot New York headquarters at 160 Varick Street in Manhattan will be shuttered. The facility — which housed Esprit’s global design, branding, creative and marketing teams, a showroom, and a photo studio — has been in operation since February 2023, and was tasked with reviving the brand, which disappeared from the U.S. retail landscape in 2012 but kept stores operating in Europe.
Esprit was hugely popular in the 1980s and 1990s, but moving into the 21st century it didn’t keep up with fashion trends and rising competition. At one time, there were hundreds of stores in the U.S., Europe and Asia, but currently there are only a handful of doors left operating in Europe.
In New York, Esprit staffed up to about 115 employees about two years ago, but earlier this year the staff was cut to 50. Esprit does not operate any stores in the U.S.
“With costs and rents and the state of the business, it was unsustainable,” Tony Strippoli, chief operating officer of Esprit in the Americas, told WWD. He also said that the company “ramped up too fast” in an attempt to revive the brand.
While there was some question over whether U.S. consumers would welcome a revival of Esprit, Strippoli contended: “There wasn’t a fashion issue or a brand issue. It was more of a cost issue and related to state of the business in Europe. There has been a long legacy of losses there. The North American strategy was to latch on to Europe.”
Strippoli added that as the European Esprit businesses floundered, “It was really difficult to support the overhead.”
Earlier this year, Esprit’s retail operations in Belgium, Germany and Switzerland, a total of 160 stores, were shut down through bankruptcies, according to Strippoli. As of Monday, some stores still operate in Europe.
The U.S. business is owned by the parent company, Esprit Holdings Limited, which is based in Hong Kong. The parent company is owned by several insiders and institutional and other investors.
Esprit’s headquarters moved from San Francisco to Ratingen, near Düsseldorf, years ago, while factory, sourcing and financial operations have been situated in Hong Kong, where the company has been listed on the stock exchange since 1993. As of Monday, the stock was still trading.
Esprit’s ultimate fate is unclear at this point, though a deal to sell the IP rights is conceivable. “The U.S. situation is still fluid,” said Strippoli. Last week, German shoe retailer Deichmann bought the trademark rights for Esprit footwear in Europe and the U.S.
In June, Strippoli told WWD that while Esprit in the U.S. would be downsizing dramatically, it would not wind down completely. “Things changed,” he said Monday. The attempted revival of the brand in the U.S. started approximately three years ago.
Esprit was founded in 1968 by Susie and Doug Tompkins in San Francisco and was influential in promoting sustainability and a California laid-back style. The brand became known for well-made basics, bright colors and patterns, boxy, oversized silhouettes, classic denim pieces, and sporty details like color-blocked windbreakers, oversized sweaters and graphic T-shirts. By 1978, sales topped $100 million a year and the company formed partnerships in Germany and Hong Kong. The brand used real people in its ad campaigns and asked young people to send in their suggestions on how to improve the world. Even in the ’90s, the brand was making looks out of organic cotton.
While having great success through the ’90s, the brand later suffered through management changes, reorganizations and product revamps, moving in and out of markets around the world and eventually losing relevance.
The 2023 reveal of the new Esprit included a collection that emphasized versatility, oversized, masculine-feminine unisex and lots of layering. Fashion executives characterized the new look as gorpcore, a combination of outdoor and city styling. It was a far cry from what made Esprit in the past a success.
