There are signs of the next bankruptcy in the fashion industry, and the rumor mill is bubbling. Can Esprit still get out of trouble?
Berlin – The internationally active fashion group Esprit is apparently in an extremely precarious financial situation. The two subsidiaries in Switzerland and Belgium have now had to file for bankruptcy. And there are also initial signs that business in Germany will soon stop. However, there is a glimmer of hope: talks are ongoing with an investor.
Esprit had to file for bankruptcy in Switzerland and Belgium
Esprit's headquarters are in Hong Kong, but until 2021 the group also had a headquarters in Ratingen, Germany. The company is now active in over 30 countries and is also one of the best-known high street brands in Germany. There is hardly a shopping mile in German city centers that does not have at least one Esprit branch.
But things have been looking anything but rosy for Esprit for some time now. The company made a record loss in 2023, which is why the annual report for last year states that there are “significant doubts” about the continuation of the group. This gloomy forecast now seems to be coming true: at the end of March, Esprit Switzerland Retail AG filed for bankruptcy, and on April 9th the branch in Belgium followed suit. All branches will be closed in both countries.
And the financial difficulties are already having an impact in Germany. The most important franchise partner in this country, the PTH Group, turned its back on Esprit at the end of March and converted its stores. Branches of fashion brands such as “Catches” are now set to move in where Esprit stores once stood. According to the trade magazine
TextilWirtschaft,
a total of 40 locations in Germany are affected.
Discussions with new investor for Esprit's European business
On Wednesday (April 10th) the portal continued to report: Esprit is in negotiations with a new investor for its European business. The private equity investor Alteri, who also owns labels such as Cecil and Street One in this country, is interested in Esprit's licensing business. “The potential investor intends to support the company in restructuring its European business,” Esprit said, according to
TextilWirtschaft
. “At the same time, the potential investor is interested in investing in the company to benefit from future growth in the company’s strategic focus markets, including the North American and Asian markets.”
It is not certain whether this will be enough to save the label from bankruptcy - but given the situation, it is certainly questionable. Esprit is not alone: Germany is currently experiencing an unprecedented wave of bankruptcies, which recently hit a German mechanical engineering company that had to file for bankruptcy even though it is one of the world market leaders in its field. Since the survey began in January 2016, there have never been more company bankruptcies, as the Halle Institute for Economic Research (IWH) announced.