Such news does not come as a surprise in these times, but with the fashion group Esprit it has a remarkably prominent sender: In view of the corona crisis, the well-known textile company is forced to flee with a number of its German companies in a protective shield procedure under German insolvency law. This emerges from a letter that Esprit boss Anders Kristiansen sent to partners of the company and which is available to manager magazin.
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In the letter, Kristiansen explains the decision in a few sentences. The protective shield procedure was created in order to protect companies from liquidity requirements, as they will be facing Esprit and others in the near future, according to the company boss. “I am very sure that this is the right step for Esprit.”
A judicial administrator becomes a supervisor
Together with the supervisory board, he decided to take this step to secure Esprit’s future, said Kristiansen. With his management team, he will remain in full control of the company – but under the supervision of a court-appointed administrator. A restructuring plan for the companies concerned should be drawn up during the months of the protective shield procedure.
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Background: The protective shield procedure is a special variant of the insolvency procedure, similar to the Chapter 11 procedure in US insolvency law. The company concerned remains largely in self-administration. The aim is to draw up an insolvency plan as quickly as possible in order to facilitate a reorganization.
Esprit was founded in California in the late 1960s. The company has been listed on the Hong Kong stock exchange since 1993. The fashion chain, which, according to its own information, is currently active in 40 countries worldwide, had total sales of just under 13 billion Hong Kong dollars (around 1.5 billion euros) in 2019. In 2015, it was more than 19 billion Hong Kong dollars.
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