The corona crisis pushes E5 Mode to the abyss. The Belgian clothing chain received three months’ protection from its creditors from the judge on Wednesday morning. Owner Frédéric Helderweirt wants to find new investors to save the chain.
E5 Mode revenues have plummeted since the government decided two weeks ago to close all stores to fight the corona virus. The 56 Flemish and 12 Walloon E5 Fashion stores have been closed since March 16. They would stay until at least April 19, possibly even until May 3. That is unsustainable, according to the company they miss out on turnover of 12 million euros.
This is detrimental for the chain, which made a loss of 7 million euros in the broken financial year 2018-2019 on a falling turnover of 79 million euros. According to Helderweirt, sales did grow by 4 percent in the fiscal year ending in February. The chain remained loss-making.
The question arises whether E5 Mode can find an acquirer now that the economy is in trouble due to Covid-19. Helderweirt believes in it. “The plan to make the chain financially healthy again was ambitious, but realistic,” he said in a press release. “Unfortunately, a reorganization takes a long time and many efforts are noticeable only after a longer period.”
While the search for investors continues, the webshop remains open. The stone shops will open again as soon as it is allowed.
I acquired E5 Mode at the end of 2019. I never thought I would end up in the most serious health crisis in human memory in no time.
The news comes three months after E5 Mode founder Etienne Kaesteker and his cousin Alexander Talpe sold the family chain to entrepreneur Frédéric Helderweirt after 40 years. The Belgian fashion chain had been running at a loss for years and the founding family could not turn the tide. Nothing is known about the sales price.
“I acquired E5 Mode at the end of 2019 with the intention of guiding the company through a difficult period and being able to save most of the employment,” says Heilderweirt. ‘I never thought I would end up in the most serious health crisis in human memory in no time. If I had known this, I might not have started. ”