American clothing giant Esprit announced that it will close all stores on May 31 and withdraw from Asia. According to relevant information, Esprit, which was founded in the United States in 1968, was founded by American young Douglas Tompkins, who is also the founder of the well-known sports brand “The North Face”. In 1992, ESPRIT entered the Chinese mainland market. This entry into the Chinese market was a full 10 years earlier than Uniqlo. However, in recent years, its market share in China has been declining year by year, and it has also distanced itself from Uniqlo’s market share. Recently, ESPRIT’s Chinese stores and official website have cleared inventory through 10% off sales. In April, the Tmall flagship store also joined the discount sale queue. With this kind of clearance sale, ESPRIT clothing giant announced its withdrawal from Asia.
Esprit’s sad departure in China can be analyzed in the following points:
1. The existing products themselves are deficient and cannot meet the needs of Chinese consumers
Ke Qinghui, chairman of Esprit Global, once said that the design and size of Esprit’s existing products in the Chinese market failed to meet the needs of Chinese consumers. The need for investors is a major reason for its sluggish sales. Products are always the core competitiveness of a brand. Whether Esprit’s products are single and outdated in style and design, or the size does not meet the needs of Chinese consumers, Esprit’s market competitiveness has suffered a huge blow. At the same time, Esprit also needs to face the impact of the competitiveness of brands in the same industry. The shortcomings of its own products have made it completely lose its competitiveness in the market. The Chinese market has strong consumption potential. Faced with China’s huge market capacity, Esprit’s parent company Esprit Global has determined to make multiple adjustments in an attempt to occupy the Chinese market share, and plans to open more stores in China by 2023. 220 homes.
The design and code number that are not in line with the needs of Chinese consumers, in the face of China’s strong demand market, can only choose to leave the market sadly. By the end of this month, Esprit will close all Chinese stores and withdraw from Asia. The sluggish sales performance makes it difficult for the American clothing giant to maintain its normal operations in the Chinese market under the impact of the epidemic, and its performance in the entire Asian market is also quite worrying. Multiple adjustments and layouts will ultimately make it difficult to seize China’s clothing market share with sufficient competitiveness to obtain a large number of consumers. Esprit continues to shrink its front lines, closing all stores in the Chinese market. After withdrawing from Asia, only the European market remains.
Esprit, a brand widely known by those born in the 80s and 90s, has accompanied the young people of 1998 for nearly ten years. In May The completion of the Chinese market will be officially announced later.
According to relevant analysts, ESPRIT’s vague and vacillating positioning in the Chinese market in the past decade has led to its gradual decline under the impact of high-end retail brands such as Zara and Uniqlo, which ultimately led to its decline in the Chinese market. Evacuation failed. According to relevant information reports, it is known that Esprit has exposed related problems in terms of product positioning, channel structure and operation management. Faced with a very obvious loss of control in handling the problem, the actual feedback of the increasingly declining performance data is in its performance sales and market share. Faced with the lack of competitiveness, Esprit’s exit is an inevitable result regardless of whether it is affected by the epidemic or not.
2. Decline and loss in financial revenue
According to relevant data, from 2011 Between 2019 and 2019, Esprit’s operating income continued to decline year by year, with frequent losses occurring. Once, between 1993 and 2007, ESPRIT had more than 300 stores. The share price of Esprit Global has increased by 65 times, making it the “King of Stocks” in Hong Kong. When the financial crisis broke out in 2008, Esprit Global Operations began to gradually lose its former glory. From its peak position as “King of Stocks” to the present, Esprit’s share price has plummeted by more than 99%, and its market value has shrunk at an alarming rate from a peak of more than 170 billion Hong Kong dollars to about 1.1 billion Hong Kong dollars.
The shrinking brand value and worrying financial situation have caused Esprit’s normal operations in the Chinese market to face survival problems. The global epidemic outbreak has brought a severe impact to Esprit. According to the Financial Times, economist Song Qinghui pointed out that “In recent years, Esprit’s development has not been very satisfactory. For now, whether it is liquidating stores, closing stores, or withdrawing from the Chinese market, the root cause is the continued poor performance of the entire group.” It is reported that in addition to leaving China sadly, Esprit will also close its 56 stores in Asia except China. It can be seen that Esprit faces huge challenges in its operations in Asia. Whether it is China or the entire Asia��, large-scale store evacuation will be a major adjustment of Esprit’s business strategy. The following is an overview of the group revenue of ESPRIT parent company Esprit Global for the nine months ending in the first quarter of 2020:
For the recent revenue situation in the Asian market, it can be known: from June 2019 to 2020 In March, Esprit’s revenue from the Asian regional market accounted for 6.8% of the group’s revenue from 10% in the second half of 2019 to 6.8% in the first quarter of 2020; performance revenue data in the Asian market accounted for less than Sharp decline in speed;
3. Esprit is one of the many overseas clothing giants that has withdrawn from the Chinese market
Esprit The closure of stores in the Chinese market and the withdrawal from the Asian market are not the only few overseas clothing giants. It is no longer an uncommon event for well-known overseas clothing brands to withdraw from the Chinese market. Previously, New Look, Asos, Topshop, Forever 21 and other brands have withdrawn from China, including Old Navy, a sub-brand of the overseas clothing retail giant GAP, which is relatively well-known in the market. The withdrawal of major overseas clothing brands is now The clothing industry is a common market example. Faced with this strong market demand, many overseas clothing giants have made plans to enter the Chinese market in an attempt to seize China’s market share. However, batches of companies have failed miserably in the clearing model. The competition in the Chinese market in the apparel industry has changed, and the global strategic business scale deployment has adopted a clearing model to retain highly competitive apparel giant brands; overseas apparel brands are also seizing the Chinese market with strong market competitiveness year by year. On the market, it is firmly occupying the Chinese market with a strong attitude; closing stores is a prelude to collapse.
4. Under the impact of the global epidemic, various clothing giants have closed stores around the world
The economic turmoil in the United States and the impact of global public health events have posed severe challenges to the industry. According to relevant reports, Inditex, the parent company of Spanish fast fashion giant ARA, closed 3,785 stores worldwide in March; German sports brand Puma also closed nearly 80% of its stores in the first quarter of this year; by reducing stores and reducing costs, Strategic adjustments to maintain the normal operation of enterprises in this severe test have appeared frequently in the global market.
5. China’s economic recovery from the epidemic has enabled factories in China to take the lead in resuming work
It is reported that well-known brands such as Puma and Nike are currently The brand’s factories in China have fully resumed operations. During the outbreak of the COVID-19 epidemic, China took the lead in achieving economic recovery by obtaining prevention and control measures that were recognized both domestically and internationally. This made China the first economy in the world to achieve economic recovery. With the recovery of the economy, demand in the Chinese market has also recovered. Facing China, the second largest economy in the world, its strong demand has caused many overseas clothing giants to pay great attention to the business strategy deployment of seizing its market share. The analysis pointed out that the retail performance in China is expected to provide important support for many brands. </p
