The Swiss subsidiary of Hong Kong-based Esprit has filed for insolvency as it looks to reorganise the business amid an “economic slowdown”.

Esprit Switzerland Retail AG (ESRA), a wholly-owned subsidiary of the company, has commenced with the insolvency proceedings in the court of Switzerland and said it will now focus on a “comprehensive reorganisation” and “strengthening its business with wholesale and franchise partners”.

In a regulatory filing with the stock exchange of Hong Kong, on which Esprit is listed, the company said that the insolvency and the resulting store closures were “unavoidable” and came due to a combination of an economic downturn, a sharp rise in energy and logistics costs, negative consumer sentiment in Europe and high rents for “unsuitably sized stores”.

Unaudited financials for ESRA’s total assets and consolidated liabilities at December 31, 2023, came to 494.4 million Hong Kong dollars and 593.4 million Hong Kong dollars, respectively. Esprit noted that there would be “no direct material adverse impact on the group and the business”, with the rest of the company’s operations to remain normal.

Executive director Paul Josef Schlangmann resigns

Alongside the announcement yet unrelated to the insolvency filing, the Esprit board also revealed that Schlangmann Wolfgang Paul Josef had resigned as an executive director and member of the general committee with immediate effect.

According to the separate filing, Schlangmann’s exit comes as he looks to “spend more time with his family and further pursue other business interests”, with the company noting that the former executive had “no disagreements with the board” that needed to be raised with shareholders.

Esprit went on to add that over his two years of service, Schlangmann was an “invaluable asset” that offered “timely, perceptive and professional advice”, while “seeking new markets and business opportunities”.