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Esprit enters restructuring amidst Covid-19 shutdowns
02 Apr 20 2 min read
Esprit, an international fashion brand, has announced several of its German subsidiaries have applied for Protective Shield Proceedings under German Law. Protective Shield Proceedings protect Esprit from creditors’ claims for the next months. The current management team will remain in control of the company, with the oversight of a court appointed custodian.
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The proceedings shelter the companies from liquidity challenges the industry is facing due to the Covid-19 pandemic. The company reported that its management has decided to make this proactive and forward-looking step to ensure ongoing business operations. During the protective period, the management team will work out a restructuring plan which will also need to be approved by a creditors’ meeting.
“This is the right step for Esprit as the coronavirus pandemic has had a dramatic impact on our business. Under these proceedings, we are able to preserve liquidity and focus on the restructuring. We want to secure the future of this tremendous brand, and be ready for the opportunities that arise when this is all over,” Anders Kristiansen, Esprit Group CEO, said in a press release.
Under the Protective Shield Proceedings, which are similar to Chapter 11 proceedings in US jurisdictions, Esprit will restructure liabilities and long-term lease contracts. The management team is also seeking funding for salaries for its German based employees accessing government programmes.
Fibre2Fashion News Desk (JL)
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