Two weeks after the Swiss Esprit branch, its Belgian counterpart follows suit. Filing for bankruptcy means fifteen stores are to close and 148 jobs will be axed. Ten franchised stores and the webshop will remain open.
Lasting problems
Esprit has notified the Hong Kong stock exchange of its plans, saying that the Belgian bankruptcy had become “inevitable” as part of a major restructuring, Belgian newspaper De Tijd reports. The move is reportedly due to the combination of a slower economic growth, rising energy costs, a negative consumer confidence in Europe and high rents for oversized stores.
This is by no means the first negative report Esprit had to release in the past few days. Not even two weeks ago, the Swiss branch folded and the contract with its biggest franchiser in Germany was ended, closing forty stores. Days later, the brand had to admit a 16 % sales drop and a quadrupling of its losses to 300 million euros.
Brand elevation
In a press release, Esprit says it will focus on wholesale and e-commerce in Belgium, even though the sales through online and wholesale decreased faster than those through retail last year. A crucial difference, however, is that Esprit’s European wholesale activities were (just) profitable, while its European retail activities accumulated a loss of 116 million euros. In Belgium, turnover was 22.7 million in 2022, while its profits were just 85,000 euros.
“Esprit sees significant opportunities in increased collaboration with franchise and wholesale partners to further raise the profile of the brand and its collections. The focus will be on brand elevation initiatives, the attractiveness and credibility of the brand, acquisition of new target groups and an orchestrated go-to-market, the statement reads.
