Endless Jewelry this morning issued its first public statement since opening insolvency proceedings last week.
It filed for bankruptcy in Germany, where the company is registered, after conceding that it was not possible to turn its financial plight around.
Endless admitted that its policy of “right to return” on unsold stock had compounded the situation and that cost measures taken to improve its financial position since February this year had not been enough to save the business.
It said that shareholders, the board of directors and management had “reached the conclusion” that the company had to be declared bankrupt.
“Management and shareholders have been trying hard to establish a financial and sound business and they have spent considerable resources to find a sustainable model for the future. However, this has appeared not to be possible,” the company stated.
Local business reports said Endless had moved its Danish branch office from a large HQ in Brondby to a smaller set-up in Ballerup and withdrawn from a number of southern European markets in favour of local distribution. Management is also understood to have invested Dkr15m (£1.7m) in the business during the summer to try and get it back on course.
But the company was impeded by a previous strategy of allowing dealers to return unsold jewellery free of charge. It said this approach became prohibitive when the quantity of stock it received turned out to be higher than it had anticipated.
In its statement today, Endless appeared to allude to the consequences of that strategy. It said: “In February 2016, the company announced that it had to adjust the sales figures for products sold with right to return and unfortunately the following cost savings were not sufficient to make a turnaround and the result here of is to declare the company bankrupt.”
The company ended the statement by saying: “The management would like to say thank you to the employees for the great efforts made.”
In the UK market, Endless had been working with Clogau, which it appointed as its exclusive distributor for the UK and Ireland back in July 2015.
At the time of the appointment, Paul Moonga, CEO of Endless Jewelry, said: “We are very proud to appoint Clogau as our retailer in UK and Ireland. The Endless range of fashionable, colourful leather bracelets and modern charm designs are now available in 3,500 stores in 24 markets, and we still see an increasing demand, which only confirms we have a long way to go to reach the full potential of Endless Jewelry.”
Professional Jeweller has contacted Clogau to see if it would like to make a comment on the situation.