During its heyday, Orsay ran more than 600 stores across Europe. But after running into trouble during the pandemic and then Russia’s war on Ukraine, the German low-cost fashion brand started shutting down stores and e-commerce.
Now, the brand is on the upswing after Gordon Brothers’ brands division on Wednesday said it acquired Orsay’s brand, intellectual property and archives.
“We have been following the Orsay story for years and have always been impressed with the brand’s powerful connection with consumers,” Tobias Nanda, Gordon Brothers’ president, brands division, said, adding, “The Orsay brand has succeeded across regions, countries and distribution channels.”
The Boston restructuring and advisory firm is partnering with e-commerce software provider Scayle to continue marketing Orsay to European consumers. Scayle is the B2B arm and infrastructure behind About You, a distribution service provider that currently sells Orsay products on its e-commerce platform.
Although Orsay shut down its own stores in June, its fashion is currently sold through its 190-plus franchisee and wholesale partner stores as well as About You. The brand is also sold through several third party marketplaces, including Zalando.
“We will continue to sell in over 20 countries throughout Europe. We are also looking at expanding to additional countries within Europe and are evaluating new territories in the Americas,” a Gordon Brothers spokeswoman said.
She added that the franchisees continue to be an important distribution channel for Orsay. “They are the brick and mortar face of the brand to the consumer. Additionally, we have more traditional wholesale accounts who run mono-branded retail stores,” the spokeswoman said.
Founded in 1975, Willstatt, Germany-based Orsay fell on hard times last year. Last fall, the company applied for a “protective shield” proceeding under German insolvency law, similar to a “debtor-in-possession” under the U.S. bankruptcy code that allows the insolvent to operate as it attempts to restructure the business.
But the proceeding turned into an insolvency filing in January. Russia’s invasion of Ukraine in February damaged Orsay’s liquidity position, which hurt both its ability to negotiate a deal with stakeholders and obtain additional funding to stay in business. A decision was made in March to shut down and, in June the company began closing its stores and e-commerce site, reportedly putting 1,200 employees out of work.
The Boston firm’s brands division has been an investor in the fashion and consumer space for many years. In 2017, the company acquired the IP assets of teen apparel chain The Wet Seal at a bankruptcy court auction for $3 million. A year later it acquired British streetwear brand Bench Ltd, which it sold in 2020. That same year, Gordon Brothers acquired Laura Ashley. Following a relaunch of the British home brand online and in select Next plc stores in Spring 2021, Gordon Brothers in April inked an IMG deal to bring the Laura Ashley brand to fashion, beauty, homeware and hospitality categories through licensing and retail partnerships and collaborations across Europe, Australia, New Zealand, China, India and the Middle East.
And in February 2008, Gordon Brothers and competitor Hilco acquired the IP of home retailer Bombay Co., and were able to turn the brand into an asset-light, licensed operation that sold its merchandise through a variety of retail outlets. The U.S. operation, known as Bombay Brands, was sold in 2011 to Hermes-Otto International, a subsidiary of mail order firm Otto.
More recently, Gordon Brothers in February took a majority stake in women’s lifestyle brand Nicole Miller. And in April, Gordon Brothers itself received $300 million in financing from Canada Pension Plan Investment Board, giving it a capital base of over $1 billion to make additional brand investments.