Esprit divides the group into licence portfolios

Is this the long-awaited liberation or another step in the spiral of decline? Esprit announced earlier this week that it wanted to split the group, including all its operational activities, into a portfolio of licences. The company’s management now wishes to manage only the property rights and business with the partners yet to be acquired.

Recently, the fashion chain had to announce the insolvency of various individual companies and had failed to sell brand rights in the Greater China region. It is therefore absurd that the group’s management should now stress that the brand is the company’s “most valuable asset.”

Esprit is now to be transformed into an intellectual property management company and license different product groups to strategic partners. “If the right strategic partners are in place, a business model based on licensing offers considerable growth potential,” says the troubled fashion group in a statement. The least we can say is that the company has experience of licensing. In fact, for the year 2023, the related turnover amounted to around 14 million euros. 

The aim of the full licence is first and foremost to achieve efficiency benefits: “The licence allows the company to use the brand without the considerable capital expenditure associated with production, distribution and retail activities,” says Esprit.

In addition, it obtains “predictable licensing revenues,” less subject to fluctuations in demand, and can “fully focus its resources on strategic IP management and marketing.”