The retail sector in Germany is facing tough times, and even the fashion chain Scotch & Soda will soon disappear from city centers.
The fashion brand Scotch & Soda will cease operations in its nearly 40 stores across Germany at the end of August. Around 290 people will lose their jobs, according to Holger Rhode, the provisional insolvency administrator, who informed the German Press Agency (dpa). In most stores, the last day of sales will be this coming Saturday. Approximately five stores may remain open longer to sell off remaining inventory.
The employees were informed on Tuesday, said insolvency expert Rhode. Most staff members are expected to be dismissed in September. The rights holder of the brand and merchandise, a U.S.-based private equity fund, showed no interest in transferring both to a new investor or negotiating a corresponding license agreement.
Search for an investor
According to Rhode, discussions are ongoing with a fashion retailer about a possible takeover of locations and staff. Any potential investor would still need to reach an agreement with the landlords of the properties, Rhode noted. Half of the chain’s stores are located in Baden-Württemberg and North Rhine-Westphalia.
The German branch of the Dutch fashion brand, Scotch & Soda Retail GmbH, filed for insolvency in June at the District Court in Düsseldorf. The company recently reported an annual turnover of 25 million euros in Germany. The also insolvent parent company in the Netherlands had already ceased operations recently.
In the U.S., Scotch & Soda, owned by Bluestar Alliance, has taken steps to streamline its operations. The brand closed several underperforming stores, aiming to enable growth. Simultaneously, they are exploring new locations for potential future expansion.
