Yet another clothing brand in difficulty. The clothing store chain Esprit announced this Wednesday that it had filed for bankruptcy for its activities in Europe, banking on restructuring to overcome its difficulties linked in particular to rising costs and the after-effects of the Covid-19 pandemic. The group, listed on the Hong Kong Stock Exchange and headquartered in Germany, says it hopes that this procedure opened with the court in Düsseldorf (west) will make it possible to “reorganize the finances and cash flow” of its subsidiaries, adding that “ several potential investors have expressed interest in a strategic partnership.
The bankruptcy filing concerns the subsidiary Esprit Europe and six other German companies in the group. In Europe, the group has points of sale in the Netherlands, Luxembourg, France, Greece, Bulgaria, Austria, Finland, Sweden, England, Germany, Denmark, Poland, Italy, Spain, according to its website. Subsidiaries in Switzerland and Belgium, where Esprit has stores, filed for bankruptcy in March and April.
“In recent years, subsidiaries have had to face extremely high costs due to inflation, interest rates and energy prices, the after-effects of the coronavirus and the consequences of international conflicts,” explains Spirit in a press release. This situation was “aggravated by the weight of costs inherited from the past”, continues the group, citing high rents and stores of unsuitable size.
This cocktail of difficulties, to which is added competition from “fast fashion” and second-hand goods, has caused a massacre in the ready-to-wear sector for more than a year with the fall of emblematic brands like Camaïeu, Burton of London, Gap France, Naf Naf, Kookaï and others. This is the second insolvency procedure in four years for Esprit, which had cut around a third of its workforce and closed 100 outlets at the time of the pandemic.
The clothing chain was founded in 1968 in San Francisco by an American hippie couple, Douglas and Susie Tompkins – also behind the brand The North Face -, who sold their first items by traveling around California aboard a Volkswagen minibus. These founders have not been in charge for a long time. The group has been listed since 1993, with headquarters in Ratingen near Düsseldorf (western Germany). Esprit says it is present in more than 40 countries with 586 stores.
