Magazine

No. 38: Esprit Holdings


INDUSTRY

Textiles and Apparel

SALES

$2.1 billion

PROFITS

$257 million

MARTIN CHAN/

SCMP

With zero debt, earnings that catapulted 67% for the year ended in June, to $430 million, and stock that's up nearly 40% in the past year, casual clothing retailer Esprit Holdings Ltd. is on a roll. But Chief Executive Heinz Krogner-Kornalik isn't content to let things coast. Instead, the intense German, who took over as CEO in 2002, plans to add 110 outlets to Hong Kong-based Esprit's existing 630 wholly owned stores over the next 12 months. The goal is to expand sales 20%.

The secret to Esprit's success is its nonstop launch of new looks: 12 different clothing collections a year, far more than other fashion retailers. That keeps the company on top of the latest trends and gives it more pricing power. It's doubly impressive since Esprit boasts 12 different clothing lines, ranging from trendy jeans for teens to business casual for the working stiff.

Krogner-Kornalik's big challenge is turning around business in the U.S., which makes up just 3% of sales. In 2002, he bought out brand rights from the company's former San Francisco-based parent, the ailing Esprit de Corp. Now he's determined to revitalize the brand in the world's most competitive market.


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