Fashion retailer Scotch & Soda has filed for bankruptcy for its Dutch operations following “a chain of events that accelerated severe cash flow issues”.
The company said in a LinkedIn post that the pandemic combined with high inflation forced it to declare bankruptcy in the Netherlands despite reporting record sales of 342.5 million euros in FY21/22.
The court has appointed Jasper Berkenbosch, attorney at Jones Day, as the bankruptcy trustee to manage the process in the Netherlands.
Scotch & Soda said the last lockdown in the Netherlands from December 2021 to January 2022 was “particularly damaging” as the business tried to recover from the pandemic.
“This was then followed by the large drop in consumer confidence due to the war in Ukraine, the resulting energy crisis and the high inflation rates that followed,” it said.
“This again contributed to severe cash flow issues with which the company has been struggling since June last year and which required ongoing support from its lenders and shareholders.”
The company added that “unfortunately” its shareholders and lenders “were unable to help it any further and time was too short to complete the sale of the company as a financially solvent entity to a new shareholder”.
It continued: “Despite this situation, all efforts are aimed at enabling the company to continue its activities in the Netherlands and in its Dutch stores, while the bankruptcy trustee will look for a permanent solution that benefits all stakeholders.”
Scotch & Soda's 32 stores in 21 cities in the Netherlands will remain open “as usual for the foreseeable future”.
The company added that the bankruptcy does not affect its entities outside of the Netherlands. “These are not bankrupt,” it said.