FRANKFURT: Fashion group Esprit said Wednesday it has filed for bankruptcy of its European businesses, seeking to restructure the operations after they were hit by rising costs. The Hong Kong-listed group initiated the bankruptcy proceedings in Germany, saying it hoped the move would enable the affected subsidiaries to overhaul their finances.
The company “continues to explore new funding opportunities. Various potential investors have expressed their interest for strategic partnership,” it said.
The insolvency proceedings, filed at a court in Duesseldorf, concern the Esprit Europe subsidiary and six other German companies in the group. Subsidiaries in Switzerland and Belgium had already filed for bankruptcy in March and April.
“In recent years, the subsidiaries have been battling extremely high costs due to inflation, interest rates and energy prices, the after-effects of the coronavirus pandemic and the consequences of international conflicts,” the group said in a statement.
The situation was worsened by “legacy costs”, such as high rents and a “bloated” workforce, it said. Similar problems — and growing competition from online merchants and low-cost fast fashion retailers — have hit a string of fashion groups in recent times.
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