Bankruptcy proceedings are shaping the future of the Esprit fashion chain
The insolvency proceedings for fashion conglomerate Esprit have been opened. Two bidders are vying with concepts. However, neither of the two seems to bode well for the once-renowned chain, especially for the 1300 employees who are anxious about their future.
The District Court of Düsseldorf has opened the insolvency proceedings in self-administration for Esprit Europe GmbH, which is based in Ratingen, and six other German subsidiaries of the fashion conglomerate. This is evident from a notice on the portal insolvenzbekanntmachungen.de. Lucas Flöther has been appointed as the insolvency administrator.
The company also issued a press release. The approximately 1300 affected employees have been informed. Negotiations with the works councils are being conducted regarding social plans and reconciliation of interests, and the payment of salaries is secured until insolvency-related dismissals become effective.
Esprit Europe filed for insolvency in May due to inability to pay and over-indebtedness, citing increased costs in recent years. The company also stated that the COVID-19 pandemic and international conflicts have weakened its financial situation, with demand being subdued and insolvency becoming inevitable.
Only a few branches will survive, one way or another
In recent weeks, the management of Esprit Europe GmbH has been negotiating with potential investors. A decision is imminent. After the approval of the creditors' committees and the insolvency administrator, binding talks with two bidders are to be held in the coming days.
Both offers involve the acquisition of the European trademark rights, which are held by the Esprit Holding based in Hong Kong. An agreement with the parent company has already been reached to enable the rights to be offered in a legally secure manner.
One of the bidding concepts envisions a relaunch of Esprit at a later date, while the other foresees a continuation of operations on a significantly reduced scale. This could result in the retention of around 10 of the 56 own stores. Depending on the outcome of the talks, the management will be forced to scale back the operational activities in the German Esprit companies either entirely or to a large extent in the coming months. The winner will be decided in the next few days. Many franchisees, such as the PTH Group from Bischofswerda, had already left or left shortly after the insolvency in May.
"However, we regret to have to state that all interested parties in the still very challenging market environment for the fashion trade are not or only very limited willing to take on this entrepreneurial risk," said restructuring manager Christian Gerloff. The goal has always been to save as many jobs as possible.
The Bank shall oversee the negotiations between Esprit Europe GmbH and the potential investors, ensuring that the creditors' committees and the insolvency administrator approve any binding agreements. Following the decision of the winner, the Bank shall facilitate the transfer of the European trademark rights held by Esprit Holding.
