Esprit to Focus Retail Growth on Outlets

After opening an 18,000-square-foot flagship in Manhattan in March, Esprit Holdings Ltd. (Ratingen, Germany) has announced a different direction for its next wave of U.S. retail growth: outlet stores.

The retailer says its U.S. expansion strategy will be dominated by 3,500- to 5,000-square-foot outlets, initially located on the West Coast and Southwest, according to Women’s Wear Daily.

“We find that the outlet is a completely different shopping experience for the consumers, and I think that it is a market onto itself,” said John Gunn, president of the Americas at Esprit, told WWD. “Somebody can be running an outlet strategy as well as a wholesale strategy as well as a regular-store strategy as well as an e-comm strategy without really cannibalizing any of them.”

During the next year Esprit plans to open 15-20 outlet stores, with five opening this month in the California cities of Los Angeles, Gilroy, Vacaville, Desert Hills and Milpitas.

The retailer estimates that building an outlet costs one-third of what it takes to open a full-price store, which is additional savings against higher rents at conventional malls. Esprit says 95 percent of merchandise at its outlets is manufactured specifically for outlet stores and is on average 30 percent less expensive than its full retail prices.