Berlin — The German premium women’s wear brand Laurèl has filed for bankruptcy.
Through a management buyout in tandem with a financial investor, the former Escada subsidiary has been operating as an independent company since 2004.
Under financial pressure for some time, Laurèl announced in late September that a takeover agreement had been reached with Shenzhen Oriental Fashion Asset Management Company Ltd. That agreement, however, required Laurèl’s bond creditors agree to a payback of 22 percent of their investment’s face value, the renunciation of interest on their bond through Sept. 1, 2016, and to defer interest due Nov. 16, 2016 to June 30, 2017.
A first meeting with creditors to vote on the measures did not attract the necessary quorum, and the second meeting scheduled for today has been canceled.
According to preliminary figures for fiscal 2015/2016 (end April 30, 2016), Laurèl booked an operative loss of 2.4 million euros, or $2.7 million, compared to a loss of 2 million euros, or $2,5 million, while sales fell 10.5 percent to 36.5 million euros, or $ 40.5 million. But due to the sale of the brand’s trademark rights in China, Laurèl reported a net profit of 1.1 million euros, or $1.2 million, compared to a net loss of 4.5 million euros, or $5.6 million a year previously.
Dollar figures are calculated at average exchange for the period in question.
Laurèl is not the only well-known German apparel label in need of outside capital to continue restructuring measures and/or refinance earlier loans. Strenesse is again searching for an investor after its deal with Maeg Holding fell through in September. After the first meeting didn’t attract sufficient attendance, a second meeting of René Lezard’s bond creditors approved the company’s financial restructuring requirements and new investments on their part. However, Lezard announced last week that advanced talks with an investor had unexpectedly been terminated, and has started the search again. As for the troubled giant Hugo Boss, the first details about the Metzingen group’s restructuring strategy will be announced Wednesday.
The women’s premium fashion segment is not the only one currently under pressure in Germany. Market reports in late October suggested outdoor specialist Jack Wolfskin is also in “serious financial difficulty.”