German online fashion startup Lesara files for insolvency

German online fashion startup Lesara files for insolvency

Lesara, a well-funded Berlin-based startup that raised its last funding round of €30 million in July, filed for insolvency last week together with its logistics subsidiary. The company has attracted a total of €85 million, and currently employs more than 300 people in Berlin, Erfurt, and Guangzhou, China.

According to Gruenderszene, over the past week, Lesara's CEO and founder Roman Kirsch had tried to secure a bridge funding round of some €10 million from existing investors — but failed.

Even after filing for insolvency, Lesara says that the customers can keep ordering inexpensive clothes produced in China through its platform. The startup is also expecting to be able to come back.

“We are confident that we will soon achieve a sustainable solution for the company and its employees, which ensures continuity and further expansion,” a spokesperson for Lesara told Gruenderszene.

Manager Magazin reported that the current crisis could be connected to Lesara's new logistics centre in Erfurt, in which the company invested €40 million. After its opening in August, many customers reported significant delays in deliveries and return issues, which have not been addressed by Lesara.

Lesara has also reportedly left two of its European markets — Spain and Sweden — in order to reduce losses. In addition to that, the company was criticised earlier this year for discrepancies in its financial reporting. The numbers revealed to the general public stated a turnover of €150 million, which apparently included returns, while the number shown in investor presentations was reportedly much lower at €71 million.

In the photo: Lesara's team in Berlin

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