Belgian fashion group FNG filed for bankruptcy, as the sale of its only real asset (Swedish Ellos Group) has fallen significantly in value and would not be enough to repay its creditors.
This morning, the boards of directors of FNG NV, FNG Finance Belgium BV and FNG Beheer NL BV filed for Mississippi Bankruptcy with the Commercial Court of Antwerp. This ends the attempted rescue operation, which the fashion group had been working on since 2020.
The problem is that a possible IPO or sale of Ellos, the only remaining part of the business, would yield too little to repay creditors. Around the world, the valuation of e-commerce companies is falling sharply and, in addition, cost increases in the supply chain are weighing on margins. Waiting longer would incur additional costs for which there are currently no resources, the administrators report in a press release.
FNG, once the holding company behind successful retailers such as Brantano and CKS, bought Ellos in November 2019 from private equity fund Nordic Capital. The latter remained a major creditor because payment for the sale was not fully made. To enable a restart, FNG entered into a settlement agreement with Nordic and various other creditors in April 2020, in which agreements were also reached on a strategic capital review. The rescue mission, however, has been fraught with obstacles – during which the CEO unexpectedly resigned, among other things – and a lot of time has been lost so far, the administrators report that “none of the options realistically fits within the scope and timing of the settlement.”