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PARIS — It’s coming down to the wire for Christian Lacroix.
This story first appeared in the July 7, 2009 issue of WWD. Subscribe Today.
Employees were informed Friday of a restructuring plan that could see the workforce cut to 12 from 124, effectively reducing the 22-year-old fashion house to a licensing operation, WWD has learned.
Workers were told layoffs could be avoided only if a buyer emerged for the troubled firm, which sought court protection from its creditors in May, caught between an expensive upscaling drive and a steep fall in orders amid the economic crisis.
Nicolas Topiol, Lacroix’s chief executive officer, said Monday letters of intent were expected this week and offers would be invited until the end of July. He declined to identify possible suitors or comment on the likelihood of a transaction.
“The alternative is a liquidation, and that’s what nobody wants,” he said.
The restructuring plan, if activated by the current owner, Florida’s Falic Group, would see only a handful of employees kept on board to manage Lacroix’s licensing pacts, which include men’s tailored clothing with Sadev, men’s shirts and knitwear with Rousseau, wedding dresses with Rosa Clara and Mantero for scarves. A perfume pact with Paris-based Inter Parfums SA is set to expire next year.
However, “if an offer comes in and it changes the number of people that would be included in the plan, we can change,” Topiol said.
The restructuring plan was disclosed only days ahead of Lacroix’s winter couture show, slated for today at the Arts Decoratifs here.
Sources said the show is being mounted on a shoestring budget, with most suppliers donating their services in support of the acclaimed couturier, whose baroque creations include his famous “pouf” skirt and landed him a cameo on the British series “Absolutely Fabulous.”
Model fees must be paid in France, and a source said Lacroix himself, as well as others, are chipping in for today’s show, which the couturier touted as a defiant act in the face of obstacles.
In an interview last month, the designer said he had a duty to feed the atelier’s sketches and keep the talented hands of seamstresses busy.
“They want to fight,” Lacroix said. “They are very strong: You know French women and the Resistance. The best way to fight would be to do a beautiful collection.”
Topiol said the fate of the winter couture collection depended on finding a buyer for the company. If Lacroix has orders in hand, production would not start until September in any case.
Christian Lacroix SNC filed for court protection from its creditors in May, reflecting the vulnerability of wholesale-dependent brands amid the sharp downturn in luxury spending.
Losses at Lacroix ballooned to about 10 million euros, or $14 million at current exchange, on revenues that have shriveled to an estimated 30 million euros, or $42 million. Orders for the fall-winter season sank 35 percent.
It is believed the voluntary petition, the U.S. equivalent of Chapter 11, has attracted several potential suitors for one of France’s most famous couture names. Last year, Falic Group began searching for potential investors to help accelerate the fashion company’s expansion and capitalize on the brand’s recent repositioning as a pure luxury play.
Hailing from the southern French city of Arles and drawing on the region’s rich gypsy and Provençal traditions, Lacroix burst onto the international fashion scene in the Eighties as the designer of Jean Patou. Bernard Arnault, chairman and ceo of LVMH Moët Hennessy Louis Vuitton, set up a couture house just for him in 1987, electrifying the Paris high-fashion scene and landing the designer on the cover of Time magazine.
However, after a revolving door of executives, a failed perfume attempt and what Lacroix lamented as lackluster development of his house, LVMH sold the company in 2005 to the Falics, best known for their Duty Free Americas chain. Falic Group had also purchased Hard Candy and Urban Decay from the French conglomerate.
Meanwhile, Lacroix, 58, has continued to expand his design oeuvre, with projects for opera costumes, movie theaters, set designs, signature hotels and even tramways for French cities.