Esprit Europe GmbH and six other German firms of the Hong Kong-headquartered fashion group Esprit Holdings have filed for insolvency under self-administration, the company said.
The six firms are Esprit Europe Services GmbH, Esprit Wholesale GmbH, Esprit Card Services GmbH, Esprit Design & Product Development GmbH, Esprit Global Image GmbH and the general partner of Esprit Retail B.V. & CO. KG.
Around 1,500 employees would be directly affected by the decision.
The group, which has presence in Ratingen, Amsterdam and New York City, seeks to restructure its European business and had filed for bankruptcy in Belgium and Switzerland in March this year.
Business operations will continue until further notice, the group said.
The reasons cited by the group for the decision were extremely high costs faced by the subsidiaries, interest rates and energy prices, the after-effects of the COVID-19 pandemic and the consequences of international conflicts, all of which weakened the subsidiaries’ financial situation.
The situation was exacerbated by the burden of legacy costs, such as high rents of long-term lease for the unsuitably-sized stores, labour costs of overly bloated workforce and expenses related to an overcapacity logistic set-up.
This is the second insolvency procedure within four years for Esprit, which had laid off around a third of its workforce and closed 100 branches during the COVID-19 pandemic.
Various potential investors have expressed their interest for strategic partnership, the group said.
