Fashion retailer Scotch & Soda secures rescue deal
Fashion retailer Scotch & Soda has been rescued by American brand management company Bluestar Alliance after filing for bankruptcy for its Dutch operations last week.
Confirming media reports, Scotch & Soda co-trustee Erik Schuurs said the deal was “good news for quite a large group of employees at Scotch & Soda, even if, unfortunately, not all employees can be kept on board”.
At the time of the bankruptcy last Monday, Scotch & Soda had about 800 employees in the Netherlands.
About Bluestar Alliance
Founded by Joseph Gabbay and Ralph Gindi in 2006, Bluestar owns, manages, and markets a portfolio of consumer brands that span across many tiers of distribution from luxury to mass market.
This portfolio consists of major department store retail brands including Hurley, Justice, Brookstone, Tahari, Bebe, Kensie, Catherine Malandrino, Nanette Lepore, English Laundry and Limited Too.
Its chief executive officer Joseph Gabbay said Monday: "Bluestar continues to strategically build its portfolio and we see Scotch & Soda as a unique fit, widely known for its roots in Amsterdam and celebrating self-expression with a modern twist on timeless fashion pieces.”
Scotch & Soda bankruptcy
The latest update comes after Scotch & Soda announced last week it had filed for bankruptcy for its Dutch operations following “a chain of events that accelerated severe cash flow issues”.
The company said in a LinkedIn post that the pandemic and high inflation forced it to declare bankruptcy in the Netherlands despite reporting record sales of 342.5 million euros in FY21/22.
It said the last lockdown in the Netherlands from December 2021 to January 2022 was “particularly damaging” as the business tried to recover from the pandemic.
“This was then followed by the large drop in consumer confidence due to the war in Ukraine, the resulting energy crisis and the high inflation rates that followed,” it said.
It said these factors “contributed to severe cash flow issues with which the company has been struggling since June last year and which required ongoing support from its lenders and shareholders”.
Scotch & Soda said at the time that 32 stores in 21 cities in the Netherlands will remain open “as usual for the foreseeable future”.
But it added that the bankruptcy did not affect its entities outside of the Netherlands. “These are not bankrupt,” it said.