Fashion giant Esprit will shut down all its stores in Germany by the end of this year, resulting in the loss of approximately 1,300 jobs. The brand rights for its European operations are set to be sold to British investment firm Alteri.
Esprit to shut down operations in Germany amid insolvency
The well-known fashion brand Esprit has announced the closure of all 56 of its stores in Germany by the end of the year, leading to the loss of around 1,300 jobs, according to a report by Merkur. This decision comes as part of the company’s ongoing insolvency proceedings. According to reports from the Deutsche Presse-Agentur, the rights to the Esprit brand in Europe will be sold to the British financial investor Alteri, although no details have been provided regarding the purchase price.
Esprit’s German operations will be completely wound down, with the products currently available in stores to be sold off. However, Alteri will not take over any of Esprit’s operational business, meaning that none of the stores or employees will be retained. The creditor committee of the seven insolvent German Esprit companies has signed off on this decision, marking the end of Esprit’s physical retail presence in Germany.
Despite these closures, it has been indicated that the Esprit brand will continue to operate, with products still being produced and sold under the label in Germany. However, the specifics of how the brand will function moving forward remain unclear. Alteri, which also owns fashion companies like CBR Fashion with brands such as Street One and Cecil, will manage Esprit’s brand rights.
Esprit’s struggle with insolvency
Esprit Europe GmbH, along with six other group companies, filed for insolvency under self-administration in May of this year. The insolvency proceedings were officially opened by the Düsseldorf District Court on August 1. Esprit Europe GmbH is the parent company for Esprit’s operations in Germany, France, Belgium, Austria, Scandinavia, Poland, and the United Kingdom, with purchasing and sales activities managed through various European subsidiaries.
While Esprit continues to operate in around 40 countries worldwide, its operations outside of Europe are not affected by the insolvency. The company’s main holding, Esprit Holding, is based in Hong Kong, though Germany has historically been the most significant market for the brand.
This is not the first time Esprit has faced financial difficulties. In 2020, this company filed for protective shield proceedings for several of its German subsidiaries, resulting in the closure of around 50 stores and the loss of approximately 1,100 jobs. The current situation marks yet another major challenge for the once-popular fashion brand as it struggles to maintain its presence in the highly competitive retail market.
The German fashion market has faced challenges due to crises and inflationary pressures, leading to low consumer confidence and purchasing capacity.
/cdn.vox-cdn.com/uploads/chorus_asset/file/25617319/flappy_bird_new.png?w=120&resize=120,86&ssl=1 "Flappy Bird game set to make a comeback after a decade")
