Esprit’s Susie Tompkins Buys Her Husband’s Share of Clothier

In a surprising twist to the long-running family feud at Esprit de Corp., co-founder Susie Tompkins and a group of investors said Friday that they have bought the half owned by her estranged husband.

Susie Tompkins, sounding euphoric in a telephone interview, declined to reveal how much she and the investors paid to Doug Tompkins. Sales of San Francisco-based Esprit, a trend-setting maker of casual clothing for juniors and children, at one time topped $1 billion but last year were reportedly $800 million.

The agreement between the Tompkinses, whose bickering over Esprit’s direction had frayed morale at the company, was negotiated at the 11th hour as investment banker Goldman, Sachs & Co. was in the process of receiving and analyzing bids from a variety of outside firms.

Esprit was put on the auction block after Doug Tompkins passed on the chance to buy out his wife for $350 million, a figure set by Goldman Sachs. However, he said earlier this month that he hoped to get the company at auction for less.

But Monday, according to his wife, he had a change of heart when it became evident that control might pass to outsiders, most likely foreign investors. While on vacation in Arizona, Susie Tompkins received a faxed letter from her husband indicating his desire to negotiate a settlement. She flew home the next day, and the two put lawyers to work around the clock to hammer out a plan.

On Friday, Susie Tompkins said, the two celebrated the deal with a “tearful, happy, laughing” lunch at a former favorite haunt, surprising the personnel there, who had not seen the couple together since they filed for divorce last year.

“It’s a wonderfully happy ending,” Susie Tompkins said. “It became evident (to Doug) how important it was to keep it in the family.”

Doug Tompkins, an avid outdoorsman and rock climber, said in a statement that he intends to devote time to the environment and other causes. He will retain his interest in Esprit’s operations in southern Europe and other foreign affiliates.

Among the investors on Susie Tompkins’ team are Isaac Stein, who has served as her representative on the Esprit board since 1988; Michael Ying, an Esprit director and chairman of the Esprit Far East Group, the company’s main buying agent, and Bruce Katz, founder of the Rockport Shoe Co. After selling Rockport to Reebok International in 1986, Katz (pronounced Kates) formed Rosewood Stone Group, a private investment firm in San Francisco.

Stein, who is also president of Waverley Associates, a Palo Alto investment firm, will become chairman of a new board. Corrado Federico will continue as chief executive.

Susie Tompkins, 47, who was ousted a couple of years ago as the company’s chief designer, will once again take that role.

In the interview, she said she plans for the company to also design contemporary lines for older customers. It was her wish to appeal to a more mature customer that contributed to the rift with her husband, who favored sticking with the younger styles. The company’s clothing is now sold at 50 Esprit stores nationwide and in better department and specialty stores.

Contrary to earlier reports that the couple’s rift resulted in a loss for Esprit in 1987, Susie Tompkins said Esprit has never suffered an annual loss. She added that it is soon expected to report its highest annual sales in history.