BERLIN — Escada’s search for a buyer is nearing the final phase, with unbinding offers from six interested parties now on the table and binding offers from these and possibly a seventh to be submitted next week. A signed agreement is expected in the first week of November, a source close to the proceedings said.

This story first appeared in the October 26, 2009 issue of WWD. Subscribe Today.

Those bidding, the source said, involve more family groups than the typical private equity and investment firms, though some of the latter are in the running. He declined to be more specific.

Vestar Capital Partners, which owns Escada competitor St. John Knits, has been named in media reports as one of the bidders. Vestar could not be reached for comment.

The brothers Wolfgang and Michael Herz, who previously held the largest stake of almost 25 percent in Escada, have in the last weeks reduced their interest to 9.3 percent. However, a financial observer said this doesn’t “in any way” rule them out of the game.

Maurizio Borletti, chairman of Printemps Holding, which controls France’s Printemps and La Rinascente in Italy, denied reports he is a bidder for Escada. “But as a group, we are in contact with one of the bidders who asked for support in preparing his bid,” he told WWD.

If that bid goes through, he noted, “we could consider making a small investment. But we won’t be a major, anchor investment in Escada,” he stated. “At the moment, our involvement includes giving advice regarding what we think needs to be done to bring the brand back, and to help the bidder make a bid that will be successful.”

Borletti would not disclose the name of the bidder, though it has been suggested it is Sven Ley, son of Escada founders Wolfgang and Margaretha Ley, and his wife, Zoe Appleyard-Ley.

Escada also would not confirm the names of any interested parties, but an inside source said Ley was among the six potential investors, though not at the head of the list. Ley could not be reached for comment.

Neither could Giacomo Santucci, a former Prada and Gucci executive whose name, too, has surfaced in media reports. However, inside sources suggest he also is acting as an adviser rather than a potential investor.

The German fashion house filed for insolvency on Aug. 13 after a bond exchange offer for 200 million euros, or $287 million at exchange rates at that time, failed. The latest sales and profit figures date back to the second quarter ended April 30. Third-quarter figures were not published as scheduled in September, due to complications and changes in recording procedures brought about by the insolvency, Escada said.

For the second quarter, Escada reported a pretax loss of 16.3 million euros, or $21.2 million, for the Escada business unit, compared to a pretax profit of 3.5 million euros, or $4.6 million, for the period a year previously. The Primera unit, which already had been divested, was not included in the figures. All currency conversions are at average exchange rates for the respective period.

However, last summer, Escada chief executive Bruno Sälzer said the new business model with its new fashion statement and corporate structure had begun to bear fruit. “On a daily level, our sell-through and response has been much better than much of the competition.”

Borletti is also “confident in the [Escada] business. We are customers of Escada, as department stores, and thus are interested in finding a good restart for the business.

“I believe Escada is a great brand,” he continued. “It is one of the few fashion companies to be of a real, international corporate size, and has the potential to grow back to its former glory.”

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