Esprit’s US subsidiaries file for bankruptcy

Esprit Holdings Ltd. is facing continued financial challenges as its US subsidiaries, Esprit US Distributions Limited (USDS) and Esprit US Retail Inc. (USRI), filed for bankruptcy. This move follows the company’s recent struggles in key European markets.

USDS oversees Esprit’s wholesale business in the US, while USRI manages its retail and e-commerce operations. Together, the liabilities of these two subsidiaries amount to approximately US $ 61.4 million.

The boards of directors for both companies cited “weak business and financial conditions” and unsatisfactory operating results as the primary reasons for the bankruptcy filing. They concluded that it is “unlikely” for the companies to generate enough revenue to cover operating costs and meet their debt obligations.

As part of the insolvency proceedings, the parent company plans to collaborate with experienced partners to shift towards a less capital-intensive licensing model. Historically, Esprit has relied heavily on its European sales, and its US operations have been of limited economic significance.

In light of ongoing financial instability, Esprit announced in June its intention to transfer its operational business to partner companies, focusing instead on managing its intellectual property rights and licensing. Following insolvency filings for several subsidiaries in Europe and Hong Kong, the process has now extended to the US. While the company has successfully found buyers for trademark rights in other regions, the future of its textile business remains uncertain.