Esprit Files for Bankruptcy in Germany, Putting Hundreds of Jobs at Risk

Fashion brand Esprit has filed for bankruptcy for seven of its subsidiaries in Germany, threatening the jobs of approximately 1,500 employees. The Hong Kong-listed company cited financial infeasibility due to high rent, labor, and energy costs, alongside lingering impacts of the COVID-19 pandemic and international conflicts.

The insolvency filing, conducted under self-administration, affects Esprit Europe GmbH and six other subsidiaries based in Düsseldorf. Despite operating in over 40 countries, the company has found its current structure in Germany unsustainable.

In a statement, Esprit acknowledged the severe financial strain on its European subsidiaries and hinted at potential further insolvency proceedings in other countries. This risk stems from the fact that two of the impacted German entities are shareholders in Esprit businesses in France, the UK, Poland, and elsewhere.

Esprit's financial troubles are not new, having previously filed for bankruptcy in Belgium and Switzerland in March. Despite these challenges, there has been no announcement regarding shop closures in Europe, and business operations are set to continue for the time being.

Management teams of the affected subsidiaries are actively working on restructuring plans while exploring new funding opportunities. The group noted that several potential investors have shown interest in strategic partnerships. According to Reuters, a financial investor is already in advanced talks to acquire the brand rights for Europe.