Esprit files for bankruptcy for its European business. This is the fashion brand’s second bankruptcy in four years. The operation with 1,500 employees will continue until further notice.
The fashion industry in Germany is not calming down. The fashion group Esprit has once again gotten into financial difficulties. The fashion chain has today filed applications for insolvency under self-administration at the Düsseldorf District Court for its parent company, Esprit Europe GmbH, and six other German subsidiaries.
“The aim is to restructure Esprit’s European business, which is largely managed from Germany, and reposition it for the future,” the company said. There are already discussions with a financial investor who has expressed interest in the trademark rights for Europe and wants to continue the operational business. The Esprit subsidiaries in Belgium and Switzerland had already filed for bankruptcy in March 2024.
Second Insolvency proceedings in four years
This is the second insolvency procedure for Esprit within four years. During the Corona pandemic in 2020, the fashion chain had already taken refuge under the protective umbrella of insolvency law in view of the closed stores, laid off around a third of the workforce and closed 100 branches.
1,500 employees still work in the companies affected by the renewed bankruptcy. Business operations will continue “until further notice.” The parent company Esprit Holdings is listed on the Hong Kong stock exchange, but the focus of the business is in Europe. Germany alone recently accounted for more than half of sales.
Restructuring for profitability?
According to the announcement, the previous managing director Man Yi Yip will be leaving the company. The lawyers Christian Gerloff and Christian Stoffler are to take over the management and restructure the fashion group. They have made a name for themselves in restructuring, especially in the fashion industry (Escada, Gerry Weber, Adler Modemarkt).
Falling sales, management changes and Restructurings
The fashion chain is active in around 40 countries worldwide and has its headquarters in Ratingen and Hong Kong. Germany is the most important market for the group. According to the company, there are 57 branches nationwide and 124 in Europe. Esprit Europe GmbH, which is based in Ratingen, is the parent company for Esprit in Germany, France, Belgium, Austria, the Scandinavian countries, Poland and Great Britain. Purchasing and sales are organized in various European subsidiaries and sub-subsidiaries.
“Esprit is a globally known mainstream fashion brand, but has been suffering from declining sales for some time, coupled with numerous restructuring and management changes,” said Gerloff. In the event of insolvency, the European business should now be set up so that it can become sustainably profitable.