The estranged husband and wife team that owns Esprit de Corp.--known for its line of trendy womens' apparel and its former egalitarian corporate culture--on Monday announced a plan aimed at ending the couple's long and bitter feud over control of the company.
The plan could result in the eventual sale of the San Francisco-based fashion and retailing firm founded by Doug and Susie Tompkins. The Tompkinses, who filed for divorce earlier this year, each have fought to become the sole owner of Esprit.
Under the plan, Doug Tompkins will have the option to buy out Susie Tompkins' 50% interest in the business. If Doug Tompkins fails to purchase his wife's 50% stake in 120 days, his half of the company as well as hers will be put up for sale at auction, the company said. At that time, Susie Tompkins or anyone else could bid for the entire company.
"We are pleased with this major step forward in resolving the ownership of the company," said Esprit President Corrado Federico in a prepared statement. "This will allow us to continue our programs that have increased the company's profitability and financial strength."
Neither Federico nor the Tompkinses were available for further comment.
Monday's agreement is the latest chapter in the stormy personal and business relationship between the Tompkinses, who have been estranged for several years.
The Tompkinses began selling Esprit clothing in the late 1960s through catalogues mailed to affluent households. Susie Tompkins was responsible for designing the company's line of colorful and loose-fitting clothing. Her husband was responsible for the marketing and business operations. By 1987, profits reportedly had grown to $80 million on sales of $1 billion.
Esprit's corporate culture was almost as colorful as its clothing. Employees at the firm's 10-acre San Francisco complex attended free language classes and could sign up for free tennis lessons on Esprit's grass court. Employees were also given tickets to cultural events as well as use of a company-owned Lake Tahoe ski cabin.
As Esprit's sales and fame grew, so did tensions between the Tompkinses. The couple disagreed on what direction Esprit's clothing line would take. According to a March, 1988, story in the Wall Street Journal, company employees said Doug Tompkins had extramarital affairs with Esprit workers.
"There are emotional relationships in any business," said Doug Tompkins in an interview with the Journal. "Whether they end up in bed or not, that's irrelevant. I don't know any such relationship that has caused adverse effects within this company."
The Tompkinses' conflict over company strategy apparently hurt sales and profits, according to industry analysts. Esprit's move to build a chain of company-owned and franchised stores also proved costly. About 70 Esprit stores are in operation nationwide.
In the past two years, Esprit cut its staff and perks, and new managers from rival apparel firms were hired. As a result, industry officials said the company's bottom line has improved.
But relations between the Tompkinses remained rocky. In 1988, three new directors joined Esprit's board as a result of a lawsuit filed by Susie Tompkins. Later, both Tompkinses abandoned most of their operational control over the company.