Dive Brief:
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Hong Kong-based clothing retailer Esprit Holdings expects a slight profit for its fiscal year ending in December, compared with losses over the same period last year, the company reported Jan. 23.
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CEO Jose Manuel Martinez Gutierrez, who came from Zara more than a year ago, is taking a few pages from that retailer’s playbook by concentrating on attracting customers based on price and product design.
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Esprit is also revamping stores and boasts a parallax-designed website. But the return to profit is largely due to cost-cutting moves like shuttering money-losing stores, ending product lines, and leaving countries — including all in North America — where it wasn’t doing well.
Dive Insight:
Things at Esprit have been dire. The company was unable to attract a buy and eventually shut down all its North American stores and left a few other countries as well in 2012. The retailer said in a press release then that it had “lost its soul.” But it looks like CEO Jose Manuel Martinez Gutierrez may have indeed brought a bit of the Zara touch. A return to profit, even though slight, is a remarkable about-face. It remains to be seen whether Esprit can keep it up, much less if it will ever make it back into North America — something it will have to do if it expects to be considered a global brand. But at a time when retailers are bleeding, it’s nice to see signs of a turnaround.