Esprit files for insolvency in Switzerland

Esprit‘s Swiss branch has filed for insolvency, which became inevitable due to cash flow issues. All integrated stores are closing.

No longer viable

Esprit Switzerland Retail AG, the Swiss branch of fashion brand Esprit, filed for insolvency on Monday. It is no longer financially viable to continue retail operations in their current structure in Switzerland, the group stated. The chain points to the general economic slowdown, combined with the sharp increase in energy and logistics costs, as well as negative consumer sentiments. In addition, rents for “unsuitably sized stores” became too high. As a result, cash flow became insolvent.

The bankruptcy only affects the retail company’s own operations in Switzerland. Other countries are not part of the bankruptcy, as are franchise shops and wholesale operations. Esprit does say it is now focusing “on a comprehensive reorganisation and on strengthening its operations with wholesale and franchise partners”. The fashion brand also wants to “generate new momentum” in e-commerce.

In the first half of 2023, Esprit’s sales fell 17 %, also because of negative consumer sentiment. Profits plunged to 714 million Hong Kong dollars (80 million euros) below zero. In the second half of the year, the group predicted improvement, but in early February the chain had to issue another profit warning. Sales and profits continue to fall.