By and  on June 1, 2009

PARIS — In the wake of Christian Lacroix’s Chapter 11 filing last week, the designer has told his collaborators he will give “200 percent” to keep the 22-year-old couture house intact.

The goal is to “preserve the know-how, without which the lungs and the heart of the house couldn’t exist,” Lacroix wrote in a letter to the firm’s 125 employees, excerpts of which were obtained by WWD.

Lacroix wrote he is “not ashamed” to admit that he is among parties owed money — some 1.2 million euros, or $1.7 million at current exchange — and that he has been designing collections “free of charge” for several months.

The designer is not a salaried employee, but rather contracts his design services via his own company XCLX, through which he does a variety of projects, from signature hotels and opera costumes to tramways for French cities. According to sources, XCLX is also at risk of a bankruptcy filing.

As reported first in WWD last week, Lacroix filed a petition with the commercial court here for protection from its creditors, caught in a crunch between the economic crisis and a costly upscaling drive. A hearing is expected this week.

Losses at Lacroix, owned by Florida-based Falic Group, have swelled to about 10 million euros, or $14 million, on sales that have sunk to 30 million euros, or $42 million, as stores cut orders or cancelled deliveries amidst a steep pullback in luxury spending.

Meanwhile, Philippe Benacin, chairman and chief executive officer of Paris-based Inter Parfums SA, said his firm decided more than a year ago not to renew its Christian Lacroix fragrance license when it expires in 2010. That business generated less than 1 million euros, or $1.4 million at current exchange, in 2008. Benacin added if the Lacroix fashion business were to be stopped before 2010, the brand’s fragrance license would be terminated as well.

Inter Parfums — which also holds beauty licenses for brands such as Burberry, Lanvin, Quiksilver and Van Cleef & Arpels — signed on the Lacroix beauty business in 1999. The brand’s recent bestseller, C’est La Fête, was introduced last year.

Christian Dior held the Lacroix license prior to Inter Parfums.

Unrelated to its license with Inter Parfums, Christian Lacroix joined forces with Avon Products in April 2007 to create and launch fragrances through Avon’s own distribution channel. So far, these have included the Rouge, Noir and Absynthe scents. The companies’ multiyear partnership was part of Avon’s strategy to strengthen its brand’s competitiveness through designer and celebrity alliances. For Lacroix, it was a chance to tap into the mass market to build brand awareness, particularly in South America and the Far East. In 2007, Rouge served as an important driver of Avon’s fragrance business, with the scent ringing up about half of the category’s 23 percent growth.

Avon executives declined to comment on the company’s Lacroix fragrances.

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