Esprit places books in Switzerland

Swiss branch spirit She has filed for bankruptcy. All company-owned Swiss stores will be closed, but franchise locations will continue to exist.

It is no longer viable

Esprit Switzerland Retail AG, the Swiss subsidiary of fashion brand Esprit, filed for bankruptcy in a Swiss court on Monday. “Bankruptcy and store closures were inevitable,” the company said in a press release. The group said that from a financial standpoint, it is not possible to continue retail operations in its current structure in Switzerland.

The clothing chain cites the general economic slowdown as well as the sharp increase in energy and logistics costs, but also negative consumer sentiment in Europe as reasons. In addition, rents for “missized stores” have become very high. Cash flow in particular has become distressed.

Extensive reorganization

Bankruptcy only affects the activities of the retail company in Switzerland. Other countries therefore remain exempt, just like franchise stores and wholesale activities. However, Esprit says it is now focusing “on a broad reorganization and on strengthening its activities with wholesale and franchise partners.” The fashion brand also wants to generate new momentum in e-commerce.

In the first half of 2023, Esprit's sales fell by 17%, also due to negative consumer sentiment, while profits fell sharply into the red with a loss of HK$714 million (€84 million). The group expected an improvement in the second half of the year, but at the beginning of February, the chain was forced to issue a new profit warning. The fashion formula recognizes that sales volumes and profits continue to decline.