Hong Kong-headquartered fashion company Esprit Holdings has announced the insolvency filing of its Belgium subsidiary – Esprit Belgie Retail (BEBR) – as part of the ongoing comprehensive reorganisation.

BEBR, an indirect wholly-owned subsidiary primarily engaged in the retail distribution of apparel and accessories, applied for insolvency at a court in Belgium on Monday. All stores operated by the firm will shut down as a result.

Esprit cited several headwinds including economic slowdown, a sharp rise in energy and logistics costs, negative consumer sentiment in Europe and long-term legacy high rents.

The fashion retailer said it now focuses on a comprehensive reorganisation and strengthening its business with wholesale and franchise partners, as well as generating new momentum in e-commerce.

The business and other operations of Esprit remain normal during the insolvency filing.

As of December 31, 2022, the total assets and total liabilities of BEBR amounted to HK$88.9 million (US$11.3 million) and HK$80 million (US$10.2 million), respectively.

Esprit last week reported net loss of US$300 million for FY23 amid a 16 per cent decrease in revenue.