Esprit Needs Innovation

Adidas vice director will take over the job of managing China regional Esprit. After more than a year's vacancy, Esprit China CEO, this key position finally got assigned. Esprit Holdings declared on November 5th that Ms. Li, Adidas vice president, general manager of north China area was appointed to be future Esprit China chief executive officer. She will be on duty next February. At the end of 2010, the former Esprit Adidas US JS Wings China regional general manager left his job to a fashion brand of the United States, Tommy Hilfiger, and became the latter's first China regional CEO. He was one of the members of China regional foundation and management team, being the general manager of Esprit China in the past eight years.

At that time, Esprit's performance had already displayed decadent trend of slow growth. This September, the latest Earnings Season showed that by the end of this June, Esprit's net profit fell 98% year on year, from the previous year's HK$ 4.23 billion to HK$79 million as well as this brand's profits got declining in triennial. Esprit Holdings announced in their annual report that last year's fiscal performance is unsatisfied because of the drag in wholesale business and European business' poor performances. At present 79% Esprit sales performance comes from European market.

With this bad yearly report, Espit Holdings as well proclaimed rebranding plan, which will achieve HK$18 billion in the following 4 years. The company announced that they will shut down 80 stores successively, including 65 stores in Europe and 15 stores in Asia. They will enlarge investment in renovation and developing brand new sales network among over 200 stores in China and other regions. They hope that in the next 5 years, the mainland market's sales amounts will be doubled, and expect to reach up to HK$6 billion. Their operating sales points will also be increased to about 1900, and planning to develop e-commerce platform in China in the second half of the new fiscal year.

This China strategy will be concretely carried out after the new CEO's inauguration. Relevant people of Esprit Holdings investors said to reporters on November 16th that, with abundant managing experience, Ms. Li will be chiefly responsible for the performance of metamorphosis in China regional parts. Public information displays Ms. Li has been worked in Adidas for 11 years. She has been held the CEO post of northern China from the year of 2005 and made markedly increase in regional yearly sales and profits under the duty of whole operation, distribution management and business expansion, therefore, Adidas Store north part wined the title of "the best growth area in China from 2007 to 2008".

Adidas China areas had been largely beset by inventory since 2008 Olympic Games, getting positive growth for the first time in 2010. Some investors felt anxious whether the way that Adidas got sales increase through overstock would continue to Esprit. As for that, the officials said the strategy of Esprit China region has already been formulated, and Ms. Li would be just responsible for carrying out in the frame range, yet there is no such worries.

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