According to the announcement from Esprit Holdings (00330) on the Zhitong Finance and Economics App, Esprit US Distributions Limited (USDS, an indirect wholly-owned subsidiary of the company) and Esprit US Retail Inc. (USRI, a direct wholly-owned subsidiary of USDS, collectively referred to as the US subsidiaries) each have made voluntary petitions for relief under Chapter 7 of the US Bankruptcy Code to seek relief and approval of the bankruptcy applications from the United States Bankruptcy Court for the Southern District of New York. Subsequently, the bankruptcy applications were made on October 25, 2024 (Eastern Time).

The announcement stated that considering the poor business and financial condition of the US subsidiaries, as well as unsatisfactory operating performance, the respective boards of directors of each US subsidiary believe that it is unlikely for the US subsidiaries to generate sufficient revenue to cover their high operating costs and fulfill their debt obligations. Therefore, the boards of directors of the US subsidiaries deem it appropriate and in the best interests of each US subsidiary to pursue bankruptcy applications.

Following the submission of the bankruptcy applications, the company will no longer be considered to have control over the US subsidiaries. As a result, the financial performance of the US subsidiaries will no longer be consolidated into the group's financial performance.

Initiating the bankruptcy proceedings is expected to significantly reduce the group's operating costs and eliminate the group's ongoing financial support. Looking ahead, the company plans to collaborate with competent and experienced partners to enhance and expand its light asset licensing business operation.