Esprit's Belgium Unit Files for Insolvency

Dow Jones04-09

By Jiahui Huang

Fashion retailer Esprit's Belgium subsidiary has filed for insolvency due to rising costs and cash flow difficulties.

Esprit Belgie Retail filed for the commencement of insolvency proceedings over its assets at the insolvency court of Belgium on April 8, Esprit said late Monday in a filing to the Hong Kong stock exchange.

Esprit said its Europe retail business operations were under stress because of high energy and logistics costs and weak consumer sentiment. Late last month, the fashion retailer's Swiss unit had filed for insolvency.

The Hong Kong-listed parent group has experienced losses in recent years. According to the latest 2023 results, Esprit's losses widened to 2.24 billion Hong Kong dollars (US$286.0 million) from HK$642 million in 2022. For 2024, the company expects global growth to continue slowing down, further crimping consumer spending beyond essential needs.

The closure of the Belgium unit was "unavoidable," Esprit said, adding that it was focusing on a comprehensive reorganization to strengthen the business with wholesale and franchise partners.

Esprit said the Belgium unit's insolvency filing won't have any material adverse impact on the group and business operations will remain normal.

At the end of 2022, the Belgium unit's total assets amounted to HK$88.9 million and liabilities totaled HK$80.0 million.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

April 08, 2024 20:58 ET (00:58 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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