Esprit pulls shirt off licensee

By DITA DE BONI marketing writer

Hong Kong-based Esprit International has withdrawn the label from its New Zealand licensee, ending a 20-year relationship.

Auckland's Lewis Group has held the licence to sell Esprit products in New Zealand since 1980, when the father of present managing director David Lewis negotiated with Esprit's Californian founders, Doug and Susie Tompkins, to sell the brand.

The New Zealand business has grown to a network of 23 stores employing 150 staff and turning over about $20 million, with 20 per cent growth annually, says Mr Lewis.

But Esprit has decided that as part of a change to its global sales and marketing strategy, it will take back distribution of its apparel locally.

The company did not return calls yesterday but the Business Herald understands the label will establish its own "super stores" similar to those in Australia.

Meanwhile, Mr Lewis has hit on a way to retain his 23 stores and large staff.

He says he will launch a new "truly international" brand of clothing from July.

"Dismantling the efforts of 150 dedicated staff and walking away from our lease commitments is clearly not an option."

Mr Lewis said the relationship between the Lewis Group and Esprit was now strained

The first sign of trouble came six months ago when the local operation was given 48 hours to shut up shop.

The Lewis Group brought lawyers in and managed to extend the contract another six months.

"The way it was handled was extremely disappointing - obviously quite a shock at the time.

"When you look at the international Esprit business now, which is listed on the Hong Kong Stock Exchange, you can see that what they did made business sense."

Apparel and Textile Federation head Paul Blomfield said seasonality of product was always a problem for companies here. "So it will be interesting to see what happens. Sometimes in this market, a big international name is not always enough."