The Board of the Dutch brand Scotch & Soda has decided to file for bankruptcy, Scotch & Soda in the Netherlands. This is what a note issued by the fashion brand announced after the courts of Amsterdam and Haarlem declared the bankruptcy of all its Dutch entities.
This decision 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., although it doesn’t affect the entities outside 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 the 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.
As explained by the company, 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 2021/January 2022 particularly damaging its financial recovery from the pandemic.
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.