Scotch & Soda files for bankruptcy of Dutch entities

Despite record sales, a structural cash flow deficit has led to the company's failure to absorb the negative effects of corona and high inflation.

The Board of Scotch & Soda had to decide to file for bankruptcy of Scotch & Soda in the Netherlands. Today, the courts of Amsterdam and Haarlem declared the bankruptcy of all Dutch entities of Scotch & Soda. This concerns Scotch & Soda Group B.V., Scotch & Soda Retail B.V., Scotch & Soda E- commerce, Scotch & Soda Holdings B.V., Scotch & Soda B.V. and Scotch & Soda Export B.V. This does not affect the entities outside of the Netherlands. These are not bankrupt. The court appointed Jasper Berkenbosch, attorney at Jones Day, as the bankruptcy trustee to manage the bankruptcy in the Netherlands.

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.

Scotch & Soda bankruptcy

This decision to file for bankruptcy became unavoidable following a chain of events that accelerated severe cash flow issues. Although Scotch & Soda outcompeted the market with record revenues of €342.5 million in FY 21/22, the Covid crisis affected its business performance and financial health negatively for two years, with the last lockdown in the Netherlands in December 21/January 2022 particularly damaging its financial recovery from the pandemic. As a matter of fact, the company’s last earnings of €20 million were lower than they could have been without the pandemic related measures in its home market at that time.

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. 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 shareholder.

Unfortunately, the current shareholder and lenders of the company 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. The Board deeply regrets that this situation has arisen. It will support the bankruptcy trustee in his efforts to set up a successful sale process to preserve the Scotch & Soda brand in The Netherlands and safeguard the jobs of its employees where possible.

Staff and other directly involved parties have been informed by management today.

At this time, Scotch and Soda will not respond to additional media inquiries as the company desires to invest all its time and energy in finding a new buyer for the company. Source: Scotch & Soda