Esprit brand affected by bankruptcy in Belgium

The noose tightens in Europe for Esprit. The clothing brand has announced the bankruptcy of its Belgium activities. An insolvency proceeding was filed with the local court on April 8, 2024, as announced by the label based between Hong Kong -where it is listed-, Germany, and the United States. At the end of March, it confirmed its bankruptcy in the Swiss market. 

In a press release, Esprit indicates that its Belgian company BEBR (“Esprit Belgium Retail”) has been declared bankrupt because its activity on site was made “financially non-viable” due to the “general economic slowdown, combined with the sharp rise in energy and logistics costs, negative consumer sentiment in Europe, and too high rents for inadequately sized stores,” the company enumerates.

Esprit’s management believes that the closure of its stores was “inevitable”. Its 15 stores bearing the brand name have already permanently closed their doors on the evening of April 8, leaving 148 employees out of work, said the press agency Belga.

This procedure concerns the brands own stores, and not the stores managed by franchise partners, which remain open for the time being. The company emphasizes that it intends to strengthen its activities with wholesale partners and franchisees on site and hopes to “generate new momentum in e-commerce” in Belgium. However, the announcement of this bankruptcy could undoubtedly tarnish the brand’s image in this market.

In 2022, the BEBR company generated 22 million in turnover, down 30% compared to the previous year, according to the data filed by the company. For comparison, it was still making close to 40 million euros in sales in Belgium before Covid, in 2019.

Esprit assures that this Belgian bankruptcy filing “will not have a direct and significant impact on the group,” but it nevertheless adds that it will continue to “evaluate all restructuring options and contingency plans to preserve the value” of its activities.

When publishing its annual results recently, the management warned that there remains “a doubt” about the future of the brand born in 1968. Its 2023 results showed a downturn in activity by 16.3%, at 5.912 billion Hong Kong dollars (around 700 million euros), while its losses seriously widened, reaching 2.339 billion Hong Kong dollars (277 million euros, up 252% in a year).