THE RISE AND FALL OF ESPRIT CLOTHING LINES
Esprit Holdings Limited is the leading manufacturer and distributor of fashionable apparel and clothing lines in Kowloon, Hong Kong China and Ratingen Germany they also distributed other products like footwear, men and women’s accessories, jewelries, cosmetics and other products but they are widely known for their clothing lines and apparel. Esprit Holdings distribute their products worldwide around the world they have 770 retail stores in 40 countries. This Company is founded by Susie and Doug Tompkins and Jane Tise as Plain Jane Dress Company in 1968 and later on become Esprit. Since then it has become an internationally accepted brand until late 1990’s when they slowly drifted low in the market that customers no longer prefer their brand like the way it was. Even Tompkins himself left the company to build his own brand that we know as Tommy Hilfiger. Esprit summary of SWOT analysis includes the following;
Strength – Although they have become weak in the market they have already establish an international acceptance their strength lies in their experience and ability to produce new styles, use the power of the media to be able to regain their strength in the market. They have also made several networks and contacts in distribution of their products. They can even come up with new product lines that can be accepted. Due to this reasons Esprit re established their sales and distribution using online and retail store selling in various countries in America, Europe and Asia and they have become successful. In their report shows in 2007 to 2008 they generated EUR 2.5 Billion Euro. The strength in their past operation is still there and can be recovered.
Weaknesses – Their weakness shows that they have not introduce a new product line during their peak years in 1968 until the 80’s, they have settled on their designs and style that people look for new fashion and models of products. The research and development has become their weakness although during those times they have gained a good customer’s trust, the owners themselves have not given the customers demand. They have become over confident that they already stopped their promotion and advertisement in media and other brands have overtaken them during those times. This results in closure and weak sales in most of their brands.
Opportunities – Still their strength is their opportunity where in fact they can still be accepted from other countries if they decided to close most of their retail outlets from other regions. In US Esprit suffered continuous loses in the last few years but they can take advantage on the other countries which they have long restricted in distribution, also in their website they still gain good market demand and a good network of distribution. Esprit can also focus on countries through which they can gain a strong acceptance just like in United Kingdom and in Australia. This has been done by the company like Kenny Rogers Roasters and they are very successful as well.
Threats – The market leadership of brands like Ralph Lauren, Gucci, Armani etc. and other competition is very strong. Another threat is the fast booming business of second hand merchandise that offers a very low priced items plus the trust of people in their brand seems to be a threat. In this case they must establish and create new products that the customers desire, good quality, latest fashion and low price products.
Accordingly customers believed that most of their merchandise, apparels and other products were no longer fashionable and their styles run out of date. They have not been making difference in the eyes of the customers who always prefer the current trend. The colors are not trendy sometimes they are too expensive. According to their competition who usually never mention their names some clothing lines like esprit has not featured a unique clothing that is why they are easily beaten, the quality has been very ordinary and their styles are poorly done that they make horrible product lines.
Considering the five porter’s forces in a collective manner the competitive rivalry of esprit to the leading brand is weak in most Asian and American countries but they can concentrate on UK, Australia and other European countries. The threats of the market for a substitute product like the coming of the second hand merchandise that usually divide the market still hinder the company to distribute from other areas because they may be branded out as a second hand but higher in price while the second hand items are half the price. The bargaining power of the customers to buy their products in the higher market level or class A may not be as the same as usual but in most class B or C communities they can gain a better opportunities if they continue to penetrate this market type and if they do, they may have a chance to reach the higher market. Focusing on countries in Europe, UK and Australia is still recommended.
The bargaining power of supplier who usually develops raw materials can hinder their operation and pricing strategy that the cost of materials plus the labor and other services is usually higher now compare to the past decades. In an overall interpretation above it shows that they have a long way to go regain their standing in terms of acceptability just like what they done in the past in the eyes of the market.
Credit:ivythesis.typepad.com
0 comments:
Post a Comment