Luxury designer Escada filing for insolvency
German luxury fashion group Escada will have to file for insolvency this week due to €70.3 million in debt and falling sales, the company announced in Munich.
The company informed its some 2,300 employees on Wednesday, and a board meeting is planned for the afternoon, when the company head will review further steps and plans to restructure the company.
Insiders say the insolvency application will be filed on Thursday. Escada management plans to present unsuccessful operational changes introduced in mid-2008 to the court.
The announcement came after Escada’s efforts to recover from its financial woes failed. The company, which employs some 2,300, has come under increasing pressure in recent months after years of struggle.
Escada is among the most famous exclusive designer labels in the world, making 90 percent of its profits abroad. The company has 182 shops and 225 franchises in more than 60 countries. Their wares include clothing, fragrances, glasses and children’s wear.