Around 1,300 Esprit employees will lose their jobs, the German Press Agency (dpa) learned on Friday. The trademark rights for the insolvent European business are to be sold to the British financial investor Alteri. In Austria, the retail chain filed for bankruptcy without going ahead with the business in June this year. 172 employees were affected.
After the European branch of the fashion chain Esprit in Germany went bankrupt in May, the Austrian subsidiary also became insolvent in the summer and filed for bankruptcy at the Salzburg Regional Court. At its peak, Esprit employed more than 600 people in this country. According to Stapf Neuhauser Rechtsanwälte, the reason for the bankruptcy was a drop in sales and serious poor planning at the fashion group’s headquarters.
“Management error” as reason for bankruptcy
With the insolvency of seven German Esprit companies in May, almost all support services and all deliveries of goods to the Austrian subsidiary were immediately stopped across Europe. “All European national companies are affected by the management errors in the group,” the law firm explained.
Esprit is to be continued as a brand in the foreseeable future, it is said. Products under the label will continue to be manufactured and sold in Germany – in what form is not yet known. Alteri owns, among others, the fashion company CBR Fashion with the brands Street One and Cecil.
Esprit Europe GmbH and six other group companies of the fashion group filed for insolvency under self-administration in May. The proceedings were opened by the Düsseldorf District Court on August 1.
Franchisees are not affected
In June, when Esprit Austria went bankrupt, the company still had twelve of its own stores in this country. In addition, 13 franchisees used the brand and operated 23 other stores. However, they are not legally affiliated with the now bankrupt Esprit Handelsgesellschaft mbH.
The Austrian Esprit subsidiary suffered an operating loss of EUR 4.9 million on sales of EUR 8.9 million in the period from the beginning of the year to June 20. In the full year 2023, the company generated sales of EUR 29.56 million, compared to EUR 37.4 million in the previous year.
The fashion group has been active in Austria since 1995. At its economic peak in 2010, the company employed 610 people in this country and operated 26 of its own stores and 60 partner stores.
Esprit is active in around 40 countries worldwide. Business outside Europe is not affected by the insolvency. The group’s main company, Esprit Holding, is based in Hong Kong. However, Germany is the group’s most important market. It had already applied for protective shield proceedings for several German companies in 2020. At that time, around 50 branches in Germany were closed and around 1,100 jobs were cut.
