Also affects retailers

Fashion chain Esprit insolvent: 170 jobs affected

The end has now also come for the Esprit fashion chain in Austria.

(Bild: AFP)

Following its insolvency in Germany, the Austrian subsidiary of the Esprit fashion chain is now also insolvent. A continuation of the company is not planned.

Following the insolvency of the European branch of the Esprit fashion chain in Germany in May, the Austrian subsidiary is now also insolvent. It filed for bankruptcy at the Salzburg Regional Court on Thursday. According to Stapf Neuhauser Rechtsanwälte, 173 employees are affected. At peak times there were more than 600. In addition to a slump in sales, the reason for the bankruptcy was serious planning errors at the company's headquarters. A continuation is not planned.

The company still has twelve branches of its own. 13 franchisees use the brand and operate a further 23 stores, but are not linked to the now bankrupt Esprit Handelsgesellschaft m.b.H. under company law.

The current assets of Esprit Handelsgesellschaft m.b.H. amount to around EUR 4.9 million at liquidation values, while the liabilities - excluding any claims for damages from existing contracts - currently total around EUR 8.4 million, according to the law firm Stapf Neuhauser, which represents the management, as stated in a press release.

The Austrian Esprit subsidiary suffered an operating loss of EUR 4.9 million in the period from the beginning of the year to June 20, with sales of EUR 8.9 million. In 2023 as a whole, the company had generated sales of 29.56 million euros, compared to 37.4 million euros in the previous year.

The sharp drop in turnover was caused by serious planning errors within the Group. Collection, distribution and sales as well as the administration of the Austrian subsidiary were more or less entirely centrally controlled, according to the Austrian management.

"A resumption of support from the Esprit Group is not to be expected", the statement continued on Thursday. According to current information, the Austrian Esprit subsidiary therefore sees no possibility of continuing as a going concern. If the insolvency administrator to be appointed follows the management's request, the remaining stock is to be sold off quickly, the stores closed, the rental agreements terminated and the company liquidated.

Esprit had been operating in Austria since 1995. At its economic peak in 2010, the company employed 610 people in Austria and operated 26 of its own stores and 60 partner stores.

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 discontinued throughout Europe. "All European national companies are affected by the management errors in the group," said the law firm. The national companies for Denmark and Finland as well as the retail companies for Benelux and Switzerland have already filed for insolvency. Further insolvency filings in other countries are in preparation.