Esprit's US subsidiaries file for bankruptcy
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Following the collapse of activities in key European markets, the wave of bankruptcies at clothing retailer Esprit Holdings Ltd. has continued. On Monday, the group announced that its US subsidiaries Esprit US Distributions Limited (USDS) and Esprit US Retail Inc. (USRI) filed for bankruptcy on October 25.
According to the company, USDS is responsible for the brand's wholesale business in the US, while USDI manages the stationary retail and e-commerce in the country. The liabilities of the two companies recently totaled 477 million Hong Kong dollars, the equivalent of just under 61.4 million US dollars.
In view of the "weak business and financial conditions as well as the unsatisfactory operating results", the boards of directors of the US subsidiaries came to the conclusion that it was "unlikely" for both companies to "generate the necessary revenues to cover operating costs and meet debt obligations", it said in justification.
Over the course of the insolvency proceedings, the parent company now intends to work with "capable and experienced partners to expand its less capital-intensive licensing model". For the clothing supplier, which generated the vast majority of its sales in Europe, the US business has so far been of only minor economic importance.
In view of ongoing financial turbulence, Esprit announced in June that it would hand over its operational business to partner companies and concentrate entirely on managing its intellectual property rights and licensing business in the future.
After the group had already sent numerous operating subsidiaries in Europe and Hong Kong into insolvency and mostly liquidated them, this process has now also been initiated in the US. The company has found buyers for trademark rights in other regions. However, it is still unclear what will happen to the label's textile business.
This article originally appeared on FashionUnited.DE. It was translated to English using an AI tool and edited by Rachel Douglass..
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