ESCADA FASHION HOUSE DECLARED BANKRUPTCY

German clothing manufacturer Escada had to file for bankruptcy in a court of Munich. The fashion house announced that it could not withstand the competition amid the COVID-19 pandemic, but the experts note that the company has been suffering losses for several years. The problems in the luxury clothing market, where Escada operates, are systemic, so staying afloat is not very easy.

The current bankruptcy is not the first in the history of company. In the mid-1990s, the Escada brand, despite the difficulties, experienced its finest hour. Then the clothes of the brand were worn by the royals - the British princess Diana and the Swedish crown princess Victoria. The new collections of the German manufacturer were advertised by Claudia Schiffer and Naomi Campbell.

Experts point out that the reason for Escada's financial problems was a change in consumer tastes.

The fashion house was founded in 1978 by Margaret and Wolfgang Leigh. After the sudden death in 1992 of Margaret Leigh, who was the soul of the company and the creative director, the brand survived a crisis, having closed a part of its retail outlets and product lines. However, the main problems began in the 2000s, when a number of risky projects did not bring success, and the managerial conflicts worsened the financial difficulties.

In 2009, the fashion house went bankrupt for the first time, and soon was acquired by a billionaire from India. Lakshmi Mittal made a gift for his daughter-in-law Megha, by making her the head of the company. Then, as well as now, the restructuring of the company was held under the watchful eye of the court-appointed manager Christian Gerloff.

In recent years, the style of the German brand has been successfully opposed by the Japanese and Italian designs.

However, experts believe that an investor for Escada will be found. The decade the brand has experienced under the Indian leadership has not been successful. Since 2017, the German company has stopped publishing business data, showing losses. In 2019, the company found an investor in the face of the American company Regent, the head of which was going to raise the business to an unprecedented level. Michael Reinstein's dreams, apparently, did not come true, and now the company's affairs will again have to be taken up by the external manager Christian Gerloff.