The famous fashion brand will close all its stores in Hungary by the beginning of June.
Orsay will close all its 33 stores in Hungary by 10 June. The clothing store’s website says that due to the economic impact of the coronavirus pandemic, they have been forced to cease operations in Hungary. They also reminded customers that they have until 10 June to redeem Orsay gift cards and Orsay Club vouchers.
Forced to close down
“Dear Customers, unfortunately, the adverse economic effects of the coronavirus pandemic have reached us, and we are sad to inform you that Orsay is forced to close its Hungarian operations by 10 June 2022,”
writes Orsay, which has 33 stores in the country.
For non-defective products bought in-store, the possibility of returning or refunding will be abolished from 30 May, Index writes.
According to hvg.hu, it was already clear that Orsay was in trouble. At the beginning of May, Forbes reported that the company was facing funding problems. The turnover of the Hungarian subsidiary, MDO Kereskedelmi Kft., fell significantly after 2019, and the company closed 2020 with a loss of HUF 1.3 billion (EUR ~3.3 million).
On 4 May, it was announced that the Hungarian online shop would be temporarily shut down.
Orsay’s problems abroad
Orsay, which has 705 stores in 34 countries, is not only in trouble in Hungary: a similar process has been going on in Austria, where its local subsidiary became insolvent a few weeks ago.
In Germany, the parent company was already saved from bankruptcy in June 2021 by a EUR 33 million (HUF 13 billion) government loan, but even with that, they were insolvent by November.
As Index reports, Orsay is currently owned by a French business group, Mulliez (their business portfolio includes Pimkie and Decathlon, among others). The group is currently looking for a buyer for the company, but their future seems very uncertain at the moment.
The only certainty is that they will close all their stores in Germany and Poland (197 in Germany and 130 in Poland) by the beginning of July.
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Source: hvg.hu, Index, Forbes
I bought a well known brand bathrobe last week. 89 euros in the shops in Budapest, 63 euros from a respectable website (delivered in 3 days, free delivery) that has its HQ in Poland but has all the main designer brands. It says it all. Hungarian branded clothes shops always charge the full recommended price and as a result have fewer and fewer customers. People are not stupid and the shops are charging too much. That will be their death knell.