Experience Store, New Balance’s former partner in Spain and Portugal, filed for bankruptcy. The company filed for bankruptcy after the U.S. brand did not renew the collaboration contract between the two parties when it expired at the end of 2021.
In this context, the 11th Commercial Court of Madrid has declared the conclusion of the insolvency proceedings, as well as the extinction of the two companies that make up the Experience Store group, as published by the financial newspaper Expansión.
The former licensee of New Balance in the Iberian market estimates the damages caused by this business breakup at 40 million euros. Experience Store had an exclusive agreement with the U.S. company since the 2011-2012 season by which it managed its points of sale in Spain and Portugal.
The company accuses the American brand of having given it to understand that its collaboration would remain in force until 2025, which is why it maintained the openings and the investment. The contract expired last December 31 and New Balance informed Experience Store of its intention to terminate it last summer, something that the licensee considered «unexpected» and which resulted in 22 closures and 250 layoffs.
The conflict has resulted in criminal proceedings for which the judge has summoned Anna Scheidgen, former CEO of New Balance in Iberia (who recently ended her career), her daughter, Angela Scheidgen, and Paul Gauron, executive vice-president of the firm, to testify as investigators on November 7.
If Experience Store accuses the sports brand of coercion, market crime and access to privileged information, New Balance argues that it chose to break the contract with its ex-partner for failing to comply with the payment schedule and accumulating debts of more than 6 million euros.