Esprit brand affected by bankruptcy in Belgium

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Esprit brand affected by bankruptcy: Esprit’s operations in Belgium have recently declared bankruptcy, adding to the clothing brand’s ongoing challenges in Europe. The filing for insolvency was made with the local court on April 8, 2024, further complicating the situation for the label based in Hong Kong, which also has a strong presence in Germany and the United States. This comes after the confirmation of bankruptcy in the Swiss market at the end of March.

Esprit declared that the bankruptcy of its Belgian company BEBR (“Esprit Belgium Retail”) was due to financial non-viability, as stated in a press release. The company cited a variety of factors for their current situation, such as the overall economic downturn, rising energy and logistics expenses, unfavorable consumer sentiment in Europe, and unmanageable rents for small stores.

Esprit’s management has determined that the closure of its 15 brand-owned stores in Belgium is unavoidable. According to the press agency Belga, 148 employees have been displaced due to the closures that took effect on the evening of April 8.

It’s worth mentioning that this bankruptcy filing only applies to the company-owned stores, not the ones managed by franchise partners, which are still operating for now. Esprit plans to strengthen its presence in Belgium by partnering with wholesale partners and franchisees, while also focusing on revitalizing its e-commerce activities in the region. Nevertheless, the declaration of bankruptcy may have a negative impact on the brand’s image in the Belgian market.

In 2022, BEBR reported a turnover of 22 million euros, which represents a 30% decrease compared to the previous year and a substantial decline from the sales of approximately 40 million euros in 2019, before the impact of Covid.

Esprit emphasized that although the Belgian bankruptcy may not have a direct and significant impact on the overall group, it is dedicated to assessing restructuring options and contingency plans to protect the value of its operations.

The management’s recent annual results publication also emphasized ongoing uncertainties regarding the future of the brand, established in 1968. Esprit’s 2023 results showed a significant decrease in activity, with a decline of 16.3%. The company reported a loss of 2.339 billion Hong Kong dollars (277 million euros), which is a substantial increase of 252% compared to the previous year. The total amount of activity amounted to 5.912 billion Hong Kong dollars (approximately 700 million euros).

Ethan Sullivan

Ethan's penchant for the pulse of the fashion world extends to covering lifestyle topics, offering readers a seamless blend of the latest style updates and lifestyle trends.

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