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The company's problems went beyond Susie and Doug's marital troubles.
Under the couple's tutelage, the company had enjoyed more than a decade of amazing success, and that success had given Esprit a can-do-no-wrong air of invincibility. But suddenly, in the fall of 1986, Esprit's pastel and polka-dot fashion sensibility fell from vogue. The fall line sold poorly. Subsequent collections were similarly blase.
It seemed Susie had lost her nose for fashion.
Doug, meanwhile, was pursuing his vision of a chain of Esprit superstores. The stores' spare-no-expense Italian interiors were meant to dazzle customers like its Oliviero Toscani ad campaigns had. At the same time, the company-owned retail outlets would allow Esprit to escape the tyranny of department stores and their buyers, who were ever more difficult to please as the casualwear garment business became more competitive.
While physically stunning -- Doug spent a reported $15 million to fashion a store out of an abandoned Los Angeles skating rink -- the superstores were economically foolish. Press accounts described such accouterments as Uchida fixtures, Zolatone walls, steel staircases, metal grids, chrome handrails, Sottsass sculptures, Alpi wood, and Vicenza stone.
But, Buckley recalls, "Doug completely ignored the first three rules of retailing: location, location, location. He built these superstores in bad locations."
The L.A. skating rink, like Esprit's San Francisco outlet store, was built in a warehouse district.
By 1988, the bickering, the money drain created by the stores, and troubles with the Esprit clothing line were combining to put the firm in a real financial crunch. While Susie and Doug painstakingly cultivated the company's image and style, Esprit's back office -- the inventory controls, purchasing and delivery systems, manufacturing oversight, and other details crucial to what is essentially a commodity manufacturing business -- had been badly neglected. As a result, when sales growth sputtered, profits evaporated.
What's more, Susie and Doug's bickering created a paralyzing standoff, stymieing either partner from capitalizing on their ideas, friends and associates recall.
From the inside, it looked as if Esprit were two different, competing companies, Buckley says. "He would shoot advertisements he wanted to shoot, she would shoot things she wanted, and they were fundamentally contradicting each other," he says.
It was Susie's lawyers who appeared before a San Francisco judge and asked that an independent director be appointed to mediate between the quarreling partners. As part of a resulting agreement, Susie and Doug jointly appointed three new members to Esprit's board of directors. The new board would decide whether Doug or Susie would guide Esprit.
Doug, who unlike Susie is quite comfortable speaking the language of corporate executives, won the battle of presentations to the reconstituted board of directors, hands down.
Under the new scheme, Doug would resign as Esprit CEO and be replaced by Corrado Federico, who had been acting as the firm's president since its 1986 financial troubles. Doug, meanwhile, would direct all of Esprit's creative activities -- both clothing design and marketing image.
Susie, according to a press release her publicist issued at the time, would be bought out and step down to pursue her social activism. The change was first announced at a surprise employee meeting. Hired, as they were, on the promise of becoming members of a youthful Utopia, Esprit staff had been kept largely in the dark about the details of the Doug-and-Susie unpleasantness.
The marriage was formally dissolved in June 1988, 23 years after its North Beach beginnings.
Susie bought a 44-acre spread in Bolinas.
Doug went about running the company. But rather than bring Esprit into a triumphant new era, Doug immediately set to bickering with the company's directorship. As the corporation's new fashion czar, he assembled a 1989 clothing line and marketing effort that suggested purchasing Esprit products was an act of anti-consumerism. Advertising copy told customers that if they didn't really need another shirt, "don't buy it."
"I wanted there to be less style-changing, less products that were obsolete before you even produced them. I wanted to see more durable products that people would use year after year," Doug Tompkins says.
In hindsight, it wasn't a terribly bad idea, says Buckley.
"Doug wanted to make products like the Gap and Banana Republic later did. He wanted to sell simple, well-made garments, and a lot of them," Buckley says. "Susie had wanted products to be trendy and hip."
The change rankled the company's new brass. Deep ecology was a fine thing for millionaire ex-hippies to dabble in, but it didn't have much to do with running a multinational corporation. Corrado Federico and Susie's representative on the Esprit board, San Francisco investment banker Isaac Stein, began to characterize Doug as an undependable dreamer who had lost interest in running the business.
"He was seen as erratic and wild," Buckley says.
As Doug bickered with Esprit's management, a new back story began to emerge in the fashion industry. The whisperers were many: Esprit had lost its soul when it lost Susie, people began to imagine; now it was foundering along as just another manufacturer of knockoff clothes. Wasn't it Susie who went on the worldwide buying trips? Wasn't it Susie who had been director of design during Esprit's heyday? Wasn't it the always-stylish Susie who was always bounding gleefully in the Esprit catalog?