Fashion retailer Esprit has commenced insolvency proceedings for its European holding company, Esprit Europe GmbH, and six of its German subsidiaries. The company announced the move in a press release on Wednesday, specifying that the insolvency filings were made in the Düsseldorf court. The proceedings also impact operations in the Netherlands, France, the UK, Austria, Scandinavia, and Poland. Earlier this year, Esprit declared bankruptcy in Switzerland and Belgium.
Financial challenges
The company cited several reasons for its financial difficulties, including high inflation costs, rising interest rates, increasing energy prices, and the lingering effects of the COVID-19 pandemic. Additionally, international conflicts have contributed to an unsustainable financial situation, according to the communiqué.
Goals of the insolvency proceedings
Esprit aims to use the insolvency proceedings to restructure and secure a sustainable future for the company. Despite the financial turmoil, the company plans to keep its shops and online platforms operational. Esprit has emphasized its intention to remain active in the market and is already in discussions with several potential investors interested in forming a strategic partnership.
Previous restructuring efforts
This marks the second time in four years that Esprit has entered insolvency proceedings. During the COVID-19 pandemic, the retailer underwent a significant reorganization in Germany and Asia, which included closing approximately 100 stores and reducing its workforce by a third.
