Escada Files For Bankruptcy

by Deidre Woollard (RSS feed)
Aug 13th 2009 at 8:01PM

We've been worried about the fate of German fashion brand Escada for a while. Now the brand is filing for bankruptcy following an unsuccessful push to obtain financing. Escada made a series of last ditch efforts to save itself include a pitching a debt restructuring plan to its creditors which was rejected. Escada has its own shops and franchise shops in over 60 countries and employs around 2,300 people. The court has chosen Christian Gerloff as preliminary insolvency administrator. The company carries around $100 million in debt and has struggled over the past year as the market for luxury goods has declined.

The news came as official data showed Germany had emerged from recession in the second quarter. There are hopes that Escada will continue onward. It has a global reputation as a designer label selling not just clothing but also fragrances, handbags and children's apparel. Bloomberg says that Russian millionaire Rustam Aksenenko owns 20.9 percent of the stock and German billionaires Wolfgang and Michael Herz hold 12.45 percent each. No one seems to know what the fate of the brand will be but I'm sure many loyal fans of the brand's understated elegance are hoping for the best.

Tags: bankruptcy, escada, fashion, germany