Scotch & Soda continues search for buyer as it files for bankruptcy for Dutch operations

Amsterdam-based fashion brand Scotch & Soda has filed a bankruptcy request for its Dutch operations, citing "serious cashflow problems".

The decision to file for bankruptcy became unavoidable following a chain of events that accelerated severe cash flow issues. Although Scotch & Soda outcompeted with record revenues of £300.1 million (€342.5 million) in FY21/22, the COVID-19 pandemic affected its business performance and financial health negatively for two years, with the last lockdown in the Netherlands particularly damaging its financial recovery.

Last month, Sky News reported that the company was exploring a sale after more than a decade in private equity ownership. The business reportedly drafted in advisers to oversee an auction following talks about a refinancing, with retail industry sources suggesting Teneo, the professional services firm, had been hired to run the sale process.

Yesterday, 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.

The bankruptcy does not affect any entities outside of the Netherlands.

Scotch & Soda is currently owned by private equity investor Sun European Partners. The brand is sold sold through its four standalone UK shops, as well as various concessions in department stores.

Despite this situation, the company stressed that "all efforts are aimed at enabling the company to continue its activities in the Netherlands and in its Dutch stores", whilst the bankruptcy trustee will look for a permanent solution that benefits all stakeholders.

Scotch & Soda has confirmed that its 32 stores in 21 cities in the Netherlands will remain open as usual for the foreseeable future.

In a statement, Scotch & Soda said: "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."

In October 2022, Scotch & Soda opened stores at Covent Garden and Old Spitalfields Market in London. The Scotch & Soda flagship at Covent Garden features the brand's new “Free Spirit” store design concept. The space includes a signature bar, dedicated children's area and library, displaying a selection of books and maps to celebrate the heritage of the building.

In December 2022, the company has announced a new licensing partnership for the design, production and distribution of its footwear collections for men, women and kids with Bos Group International.