Feuding Founders of Esprit Force Firm’s Sale
The often bitter feud between the husband and wife team who founded trendy apparel maker Esprit de Corp. will force the sale of the San Francisco-based company, officials said Friday.
The sale, which will be handled by Goldman, Sachs & Co., is the second stage of a 5-month-old agreement reached between Doug and Susie Tompkins, who filed for divorce earlier this year. Under the agreement, Doug Tompkins was given 120 days to buy his wife’s 50% interest in Esprit. If he failed, the bidding would be opened to Susie Tompkins and outside parties.
“We look forward to resolving our ownership deadlock so that Esprit can fully achieve its objectives,” said Susie Tompkins in a statement. Neither the Tompkins nor other Esprit officials were available for further comment.
Some industry analysts speculated that Esprit would draw interest from foreign as well as domestic buyers.
“I would not be surprised if there will be more than domestic buyers involved,” said Scott Killips, a partner in the consulting firm of Booz, Allen & Hamilton in San Francisco. “Esprit is well known overseas, especially in Asia and the Pacific.”
The couple began the firm in the late 1960s by selling Susie Tompkins’ designs of colorful and loose-fitting clothing through catalogues. Doug Tompkins was responsible for marketing and business operations.
By 1987, the couple had built Esprit into an internationally recognized label with profits of reportedly $80 million on sales of $1 billion. The fashion house also began a costly campaign to open a chain of flashy retail stores spread from West Hollywood to Washington.
“They made their mark with fashion-forward merchandise tailored to the California life style for woman age 12 to 24,” said Killips. “They continue to do particularly well there.”
Esprit was also known for a once colorful corporate life style. Employees could sign up for free tennis lessons on the company’s grass court and make use of a company-owned Lake Tahoe ski cabin.
But in recent years, the Tompkins have been divided on what direction their company should take. Susie Tompkins reportedly wanted styles that matured with its original customers while her husband has fought to keep the line’s youthful image. The split reflected the couple’s increasingly shaky relationship.
Industry analysts said the couple’s conflict over strategy hurt sales and profits. As a result, Esprit reduced its staff and perks and began to hire more experienced managers from rival apparel firms.
In 1988, three new directors joined Esprit’s board and the Tompkinses later abandoned their operational control of the company.
