Esprit‘s European branch is barely hanging on and now the fashion chain is also insolvent in Austria. The insolvency is due to serious planning issues at the company’s headquarters, as reported by the Austrian newspaper Standard. The sale of brand rights for the Greater China region had recently caused unrest at the company headquarters in Hong Kong.

There appear to be no plans to continue the company operations in Austria. This would also mean the loss of around 170 jobs. The Austrian subsidiary filed for bankruptcy at the Salzburg Regional Court on Thursday. According to Stapf Neuhauser Rechtsanwälte, who represent the company, 173 employees are affected. At peak time periods this involves more than 600 people.

The company still has twelve branches of its own. Thirteen franchisees use the brand name and operate 23 other stores, but are not affiliated with Esprit Handelsgesellschaft m.b.H. under company law.

According to Stapf Neuhauser, the current assets amount to around 4.9 million euros. As things stand at present, liabilities – excluding any claims for damages from existing contracts – amount to around 8.4 million euros.

In the period from the beginning of the year to June 20, the Austrian Esprit subsidiary suffered an operating loss of 4.9 million euros on sales of 8.9 million euros. In 2023 as a whole, the company had generated sales of 29.56 million euros, compared to 37.4 million euros in the previous year.

The sharp drop in turnover was caused by serious planning errors within the Group. Collection, distribution and sales as well as the administration of the Austrian subsidiary had been more or less completely centralised, according to the Austrian management team. “A resumption of support from the Esprit Group is not to be expected,” it said on Thursday.

According to the current state of information, there is therefore no possibility of continuing its operations in the country. If the insolvency administrator to be appointed follows the management’s request, the remaining stock is to be sold off quickly, the shops closed, the rental agreements cancelled and the company liquidated.

Esprit has been operating in Austria since 1995. In 2010, the company employed 610 people in the Alpine Republic and operated 26 of its own shops and 60 partner stores.