AMSTERDAM – Dutch fashion retailer Scotch & Soda has filed a bankruptcy request for its Dutch operations citing “serious cashflow problems” that started during the pandemic. Scotch & Soda has around 225 retail stores globally, including 70 franchise outlets, and had sales of 342.5m euros in the twelve months ended May 2022.
The company said the decision to file for bankruptcy for its Dutch operations does not affect its business outside the Netherlands.
In a statement, the company said: “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.”