LONDON — Luella Bartley is on the hunt for a new backer after Club 21, her brand’s global licensee and distributor for ready-to-wear and accessories, walked away from a six-year relationship and the label ceased trading.

This story first appeared in the November 11, 2009 issue of WWD. Subscribe Today.

On Tuesday, the London-based Club 21 said its subsidiary, VSQ Ltd., reluctantly had “taken the decision not to invest further in its relationship with Luella Bartley Ltd.”

The statement also said due to the unexpected closure last month of Luella’s key rtw producer, Carla Carini, spring orders could not be fulfilled. That company, based outside Mantova, Italy, went into liquidation late last month and also shuttered its own-label brands, Carla Carini and Debora Sinibaldi.

Bartley said the closure of the business was “a very disappointing situation” for everyone involved. “I very much appreciate the support that VSQ has given me, but it is upsetting not to be able to protect jobs in this difficult economic climate,” said the designer.

She said she hopes “the Luella girl can have an exciting future ahead of her, whichever incarnation she takes on next. We have a number of options open to us, and are considering these over the coming months.”

The changes at Luella had been brewing for the past six months. In June, industry sources said Bartley was restructuring her business, and indicated she would part ways with Club 21.

On Tuesday, Bartley’s spokesman and a spokeswoman for Club 21 declined further comment or clarification about the closure of Bartley’s business, the turnover of which was about 9 million pounds, or $15 million at current exchange.

However, an industry source said the business, in which Club 21 had been investing since 2003, was not hitting its profit targets.

Last year, Club 21 named Regis Rimbert, formerly of Dior and Prada, president of Luella with a mandate to take the brand to the next level. He helped to tighten operations, ramp up the quality of the collections and fashion a more commercial approach to the market, positioning the line alongside Miu Miu and Chloé. One of his first moves was to shift all manufacturing from the Far East to Italy as of the fall 2009 season.

An industry source said Rimbert also was charged with finding new investors for the Luella business. The source added the parties involved could not agree on a backer. Rimbert has since left Club 21.

Bartley, a mother of three whose partner is the photographer David Sims, is a media darling in Britain and last year won the British Fashion Council’s coveted Designer of the Year Award. Her label sells at stores including Liberty, Harvey Nichols, Harrods and Colette, and her spring 2010 collection won fulsome praise from buyers.

In the past, she has collaborated with Target and sports brand O’Neill, and she and her team have designed the Christmas windows, a special holiday grotto featuring the designer’s favorite items, and other in-store decorations at Liberty. The statement said the designer also is working on projects in the literary and film world that will be revealed next year.

According to an audited financial statement filed at Companies House, the official government register of U.K. firms, VSQ Ltd. suffered a loss of 3.8 million pounds, or $7.1 million, in 2008, compared with a loss of 2.8 million pounds, or $5.6 million, in 2007.

All figures have been converted at average exchange rates for the respective periods.

All U.K. businesses are required to file annual accounts to Companies House, although the numbers submitted are not necessarily comprehensive or reflective of the firm’s full activities.

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