NEW YORK — Add Badgley Mischka to the list of designer brands looking for new owners or investment.
Its parent, Escada AG, has put the star eveningwear label into play as part of the continuing review of the German company’s troubled operations. While smoke signals have been coming from Escada for months, as the house made cryptic statements that its ongoing focus would be limited to its core brand, Lawrence C. DeParis, president and chief operating officer of Escada USA, confirmed Friday that it is “entertaining interest in the Badgley Mischka brand with select partners.”
Escada, based in Aschheim, Germany, is also likely considering the sale of its holdings in European labels including Louis Féraud and Apriori, in addition to its announcement a year ago that the Laurèl business was on the market. Escada bought a 45 percent stake in Féraud in 2001, when Escada and Secon Groups formed a joint venture to control the French rtw brand. Féraud has sales of roughly $45 million.
Escada’s troubles date back to an expensive attempt to modernize the company’s image three years ago with a new designer and the overhaul of its stores, the results of which appeared in the marketplace just at the outset of a series of global catastrophes that have badly impacted most luxury businesses. After sales in fiscal 2002 dropped 8.7 percent to $892.7 million from $977.4 million the previous year, and continuing quarterly losses since then, the company said two weeks ago it will thin its worldwide workforce by 20 percent, or 850 employees, and close about 20 of the 183 Escada shops worldwide, as well as 15 Primera and Laurèl stores.
Escada has been strapped for cash and is carrying close to $350 million in debt. To ensure its long-term funding, its shareholders authorized the largest private investment in a publicly listed company in Germany’s history this summer, enabling HMD Partners — led by three veterans of Texas Pacific Group — to acquire up to 29 percent of Escada’s shares by investing about $50 million.
The company has since initiated a worldwide review of its operations, looking to cut costs and restore acceptable levels of profitability. At its U.S. operations, that included eliminating the position of one of its co-presidents, Caryn Lerner, who left last month, and consolidating the task of rebuilding the brand under the purview of DeParis, who was named a co-president in 1998.“We are taking a fresh look at everything from stores to staffing as we are strategizing our plans to move forward,” DeParis said. “Escada is interested in totally focusing on its core brand and we are considering divestiture of anything that is non-Escada.”
DeParis was unable to give a timetable for the sale of Badgley Mischka, but said it would be a case of “sooner, rather than later.” He has met with companies he described as appropriate buyers, “people that understand the luxury business.” He would not disclose the identity of these parties, but the brand, which has retail sales of around $40 million and a high profile thanks to the celebrity following of its personable designers Mark Badgley and James Mischka, is likely to draw interest from the same companies that have been exploring deals all along Seventh Avenue.
“It’s a brand with great potential,” DeParis said. “We are only interested in dealing with companies that will recognize what a jewel Badgley Mischka is. We’re very confident that we will find a partner.”
Although the 15-year-old label has not turned a profit in recent years, sources said, its potential is widely recognized as the company opened its first store on Rodeo Drive in Los Angeles in 2000 and recently tapped into the licensing business, with a new fur collection with BC International and possible deals in the works for footwear, eyewear and fragrance.
The designers, who met at Parsons School of Design, formed the company in 1988, initially financing the collection with money from their families. They sold a majority interest to Escada USA in 1992, and have since consistently developed the business into a leading ready-to-wear and bridal vendor.
In recent seasons, they have continued to expand with a separates group launched for Saks Fifth Avenue last year and a special-order business for mother-of-the-bride and special occasion dresses called Atelier, which operates alongside the company’s five-year-old bridal collection. The duo also opened a 2,500-square-foot bridal salon on the lower floor of Escada’s Fifth Avenue flagship this year, as well as a smaller salon in the San Francisco Escada door at Union Square. The designers could not be reached on Friday.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast