New Balance's former partner in the Iberian peninsula files for bankruptcy
Experience Store, New Balance's former partner in Spain and Portugal, filed for bankruptcy after the American brand refused to extend the collaboration agreement between the two parties when it expired at the end of 2021.
The Mercantile Court No. 11 of Madrid declared the end of the insolvency proceedings, as well as the liquidation of the two companies that make up the Experience Store group, as published by the financial newspaper Expansión.
The former New Balance licensee in the Iberian Peninsula estimates the damage caused by this partnership dissolution at €40 million. Experience Store had an exclusive agreement with the American company since 2011-2012, under which it managed its points-of-sale in Spain and Portugal.
The company is accusing the American brand of having implied that their partnership would remain in force until 2025, which is why it continued to open stores and invest. The contract expired on December 31 and New Balance informed Experience Store of its intention to terminate it last summer, which the licensee considered "unexpected" and that led to 22 store closures and 250 layoffs.
The dispute has resulted in criminal proceedings for which the judge subpoenaed Anna Scheidgen, former CEO of New Balance in Iberia (who recently ended her professional career), her daughter, Ángela Scheidgen, and Paul Gauron, executive vice president of the company, to testify.
While Experience Store is accusing the sportswear brand of coercion, market crime and access to privileged information, New Balance claims that it chose to terminate the agreement with its former partner due to lack of compliance with the payment schedule and for accumulating debt in excess of €6 million.
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