Esprit Holding has announced seven of its businesses in Germany cannot pay their bills.
This makes it “financially unviable to continue the business as it is currently structured in Germany.”
Esprit has filed for insolvency “under self-administration” for seven of its subsidiaries in Düsseldorf, Germany.
The proceedings affect Esprit Europe GmbH and six other German subsidiaries.
The company operates in over 40 countries and has one of its two headquarters in Germany (the other in Hong Kong).
Espirit cited high rent, labor costs, energy prices, the after-effects of the coronavirus pandemic, and international conflicts as factors weakening the finances of its European subsidiaries.
The fashion retailer warned that more European businesses could be affected.
Two currently impacted German businesses are shareholders in other Esprit Holdings companies in France, the UK, and Poland.
These could potentially face similar insolvency procedures in the future.
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Esprit also filed for bankruptcy in Belgium and Switzerland in March, according to Reuters.
Regarding shop closures in Europe, no announcement has been made so far.
Business operations are set to continue until further notice, but the jobs of approximately 1,500 employees are directly affected by the insolvency.
The management of each subsidiary is working on restructuring plans, and the group is exploring new funding opportunities.
The company said: “Various potential investors have expressed their interest for strategic partnerships.”
