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Abraham: A Victim of the Times

Swiss silk king Gustav Zumsteg reflects on the closing of Abraham, which he built into one of the 20th century’s greatest couture mills.

PARIS — Swiss silk king Gustav Zumsteg, who built Abraham into one of the 20th century’s greatest couture mills, was known to weep out of sheer emotion when fingering a bolt of good cloth. But now he mourns the passing of the company that has been a part of his life for 72 years.

This story first appeared in the March 11, 2003 issue of WWD.  Subscribe Today.

“Times have irrevocably changed,” he said in an interview last month. “The way we once worked hasn’t the same sense. It’s not meaningful today.”

Abraham, which Zumsteg joined as a 15-year-old apprentice in 1931, declared insolvency in October after Zumsteg stopped providing it with financing. He had owned the Zurich-based mill for almost 30 years, buying it in 1968 in partnership with his mother, Hulda, and in 1996 selling it to its final owner, Erich Biehle.

At its zenith, Abraham supplied the best fashion houses with some of their most luxurious fabrics. Zumsteg worked with the greatest couturiers, including Christian Dior, Cristobol Balenciaga, Valentino, Christian Lacroix, Bill Blass, James Galanos and Geoffrey Beene.

But Zumsteg was most closely associated with Yves Saint Laurent. Abraham’s fabrics were a staple of his collections, sometimes making up 60 percent of the fabric in YSL’s offering.

“Gustav Zumsteg was my ally, my friend and my collaborator for some 45 years,” said Saint Laurent, who in January retired. “I used his fabric in my most beautiful dresses. His talent was a never-ending source of inspiration. I owe him many unforgettable moments. His work was linked to mine in the strictest way. Often we had the same ideas at the same time. We dreamed of the same things, loved the same painters, the same countries and the same colors.”

Abraham counted on the rarified world of couture for a big slice of its sales, and could not survive in the new century as couture orders diminished. The decline of its core business and the rise of cut-rate competition from the Far East proved too much to resist.

“Abraham was amazing and it had an amazing archive,” said Tom Ford, Gucci Group creative head and designer of Gucci and YSL ready-to-wear. Although Ford called the loss of Abraham “sad,” he stressed that its closure would not impact his designs for YSL.

“We actually have much of the same archive [as Abraham] because most of the fabrics, or a lot of the fabrics that were developed at YSL over the years, were developed with Abraham, so we have all those archives as well,” said Ford.

For the last seven years, Zumsteg’s role in Abraham has been diminished. When he sold it in 1996 to Biehle, a Swiss fashion executive who’d gotten his start at the mill and went on to work as a designer in Givenchy’s licensing department, Zumsteg, now 87, planned to retire from fashion.

But former Abraham employees, speaking on condition of anonymity, said he continued to fund the company since unloading it, and contended that his financial largesse was the only reason the company stayed afloat as long as it did.

Last year, disappointed and frustrated, he turned off the spigot.

“The time came to cut the lifeline,” Zumsteg lamented. “There was nothing else to do. I guess I made a mistake in evaluating my successor.”

Biehle said that when he purchased the firm, he found it in a state of disarray and overly dependent on the diminishing sales to couture houses.

“The company was so much equated with Saint Laurent when I took it over that I had to try to take it down another road in order to build a new business and move toward luxury ready-to-wear,” said Biehle. “The problems were compounded between Abraham being in disarray and the market changing and becoming more difficult. It proved too much to overcome.”

Biehle said he planned to develop new lines and licenses when he acquired the mill. The only licenses Abraham had when he acquired it was for Saint Laurent’s scarves. It was a project he was familiar with — he had designed the first scarves the mill produced under that license in the early Seventies.

But Saint Laurent decided not to renew the licensing deal when Zumsteg left.

Biehle also said he had hoped to offer lower-priced sportswear-oriented fabric collections and branch out into accessories. These strategies failed to bear fruit. At its height, in the early Nineties, the company generated some $60 million in sales. In its last full year of operations, sales are believed to have dwindled below $7 million, with losses of about $800,000.

“We made some good contacts with companies like Gucci and Celine,” said Biehle. “But Abraham had so many problems — problems that I wasn’t aware of when I bought it. It was so backward, had a lot of debt and was stuck in the past. In short, I made a bad investment and I’ve lost a lot of money.”

However, Abraham’s employees and competitors painted a different picture.

Although the terrain undeniably has grown more difficult for top-notch European mills that work at the couture and luxury rtw level, they contended Abraham waxed irrelevant under Biehle’s stewardship. They traced the demise to bad management decisions and lack of creative vision.

“Abraham lacked a head of the company,” offered Martin Leuphold, art director at high-end Swiss mill Jacob Schlaepfer, which supplies couture houses such as Lacroix, Dior and Emanuel Ungaro. “When Zumsteg stepped away from the company, it lost its creative edge. Abraham still had a good name but they compromised on quality and creativity. Their products weren’t up to snuff. Zumsteg believed in his name and he put everything he had into the company. He made the difference.”

“Zumsteg had a very hard time finding a successor,” commented Olivier Fournier, chairman of the French mill Bucol, which works with houses such as Chanel and Dior. “It’s a very sad twist of fate that Abraham’s gone. It’s bad for the market. We need to be numerous in order to thrive.”

But the number of high-end European silk mills has dwindled. Abraham was celebrated for its prints, and in recent years that market has contracted. Meanwhile, high-end rtw firms have looked eastward for fabrics, toward China and India, where prices are some 50 percent cheaper than in Europe.

Some luxury fashion houses have taken the preservation of their suppliers into their own hands. Hermès, for example, purchased Bucol in 1995. The company produces high-end silk for Hermès, as well as other fashion houses. Chanel, for its part, acquired the famous Paris embroidery house of François Lesage last year. Seeking to preserve France’s couture know-how, Chanel also purchased the haute shoemaker Massaro. It also owns hatmaker A. Michel, feather and flower house Lemaire and buttonmaker Desrues.

“Having Hermès behind us means that we have the capital to invest and stay on top of our fame,” said Bucol’s Fournier.

Biehle adopted another tactic. To compete with Far Eastern mills, he began contracting some of Abraham’s production overseas, according to former employees. But the results were not what he had hoped.

“Our clients began to complain about the quality,” said one former Abraham executive, who spoke on condition of anonymity. “Deliveries became patchy. Biehle wanted to generate higher margins to cover his losses. But he wasn’t able to deliver.”

Indeed, silk mills have found times more taxing. Bianchini-Ferier, another mythic mill, also known for prints, was on the verge of collapse last year. Its annual losses loomed around $350,000 with sales hovering just under $5 million. But the company was saved when Cedric Brochier, a Lyon-based mill owner, swept in to bail it out.

Brochier, who acquired Bianchini in December, conceded that the market has changed. “Couture business, obviously, has become less important,” he said. “The fashion business is based on rtw and that moves exponentially quicker than before. Couture is about a third of business. Rtw is the rest. Bianchini found itself in trouble because it had failed to adapt. It was organized horizontally. No one was communicating. You have to become vertical today to make it.” Brochier said he has been concentrating on streamlining Bianchini.

“Bianchini found itself in a situation similar to Abraham,” he said. “It had this incredible history and it would have been a shame to have that disappear. All it will take to make the company viable again is to reanimate it with incredible energy and creativity. You can compete today. But you have to be on top. You have to be flexible. We turned around a collection in a month, for example. You have to make the goods worth their price. The world has changed. Competition comes from everywhere.”

At Jacob Schlaepfer, Martin explained that many mills reevaluated their way of doing business when they first came under pressure from competitors in the Far East.

“A lot of people [predicted] the end of the European mill,” said Martin. “They thought you had to go to India to produce cheaper things. Schlaepfer decided to stay the course and continue to produce high-quality fabrics in Europe with a value-added element.”

He continued: “Many of the firms that compromised their quality by moving production overseas lost in the end. They still couldn’t compete. And they lost their edge. We’ve seen that, for the last five to six years, business has been wonderful. People appreciate the quality.”

The passing of Abraham, like Saint Laurent’s retirement, marks the end of an era, according to Zumsteg.

“You either have to change with the changes of the world or give up,” said Zumsteg, who continues to live in Zurich, where he owns the Kronenhalle restaurant, which is decorated with paintings by Henri Matisse, Marc Chagall and Pablo Picasso. “That’s a decision that has to be made. You have to want to change…I’m not enchanted with what’s going on [in fashion] today. There comes an age when pulling out entirely makes more sense.

“The high-end fabric business has become infinitely smaller,” he continued. “You can’t do what you used to. You can’t take the same risks. We used to be able to make big investments for couture fabrics. You can’t do that today.”

Meanwhile, Zumsteg said he retains ownership of Abraham’s archives. “I haven’t decided what to do with them yet. Maybe I’ll donate them to a museum. That’s where they belong.”