- Esprit was counting on an investor, but the takeover won't happen. There are other options in play.
- Despite the company's efforts, 1,300 people will lose their jobs.
Read more
A well-known brand is closing its store in Kielce. Sale and end of business 
Read more
Furniture giant files for bankruptcy after 46 years. Stores are being closed
Esprit restructuring. Jobs could not be saved
Restructuring manager Christian Gerloff told ZDF that his goal had always been to save as many jobs as possible, but no interested party had been found who wanted to take on the entrepreneurial risk. Talks are still ongoing with two potential candidates, but both bids are aimed at acquiring the rights to the European brand. One bidder envisages resuming operations at a later date, while the other intends to continue operations on a much smaller scale, reports retaildetail.eu.
Negotiations failed. The Germans did not want Esprit
The fate of the fashion group's European operations has long remained uncertain. In June, negotiations with a takeover candidate, the German CBR Group, broke down.
Recall: In May, Esprit filed for bankruptcy in a Düsseldorf court for its European parent company Esprit Europe GmbH and six German companies. The bankruptcy proceedings also affect operations in the Netherlands, France, Great Britain, Austria, Scandinavia and Poland. In Switzerland and Belgium, the fashion chain went bankrupt earlier this year.
The fashion group was no longer able to meet its financial obligations and had to restructure. The brand wanted to move towards a more flexible business model, with a greater focus on e-commerce and wholesale.
Esprit's strategy failed
Since Chinese billionaire Karen Lo became the brand’s largest shareholder during the coronavirus pandemic, Esprit has been working on a new strategy. The retailer has wanted to improve its market position while keeping prices low and focusing on young consumers. To achieve that, Esprit has been cutting costs and the number of suppliers.
Esprit’s sales fell 16% last year to HK$5.9 billion (just under €700 million). E-commerce sales fell 16%, wholesale sales 20% and store sales 14%. The only positive news was licensing revenues, which remained fairly stable. Esprit blamed the unfavourable macroeconomic climate in Europe, particularly in Germany, with low consumer confidence due to the conflict in Ukraine and high energy costs.
The drop in sales also led to wider losses: the pre-tax loss widened from HK$642 million in 2022 to HK$2.5 billion (EUR300 million) a year later. The net loss was HK$2.3 billion, although the company returned to profit in 2022 for the first time since 2017.
Esprit has also failed to reduce operating costs due to “historical structural issues” at the company, and short-term restructuring efforts are costing money before they start paying off. In its largest market, Germany, for example, Esprit terminated a contract with franchise operator PTH Group, closing 40 stores.
Esprit is a clothing brand that sells women's, men's, and children's clothing, as well as footwear, watches, and accessories. The company was founded by Susie Tompkins Buell and Douglas Tompkins. It has a chain of boutiques in 40 countries around the world. According to the company, there are 124 stores left in Europe.
