PARIS — Underscoring the vulnerability of small fashion businesses in the economic downturn, two labels founded by Danish designers have been shuttered. London-based Danish designer Jens Laugesen, known for his minimalist and androgynous designs, has closed his signature label after six years. That closure follows last month’s news that Danish luxury brand Camilla Staerk was shut by its owner, Danish fashion giant Bestseller, which, via a company called MTHP A/S, had financed Staerk since 2003.

This story first appeared in the November 5, 2008 issue of WWD. Subscribe Today.

Laugesen, who won Paris’ prestigious Andam award in 2006, plus British Fashion Council awards, cited a lack of investment and declining sales. “I won all the awards possible, had sponsorship in both London and Paris, but you still need some extra funding and it didn’t happen,” he said. “I am very thankful for all the support I have received over the last six years,” he continued. He was hailed as one of Denmark’s most promising designers: In May, he won designer of the year in the country’s first fashion awards, and past collections were carried by such marquee stores as Maria Luisa, Dover Street Market and Opening Ceremony. But Laugesen’s fall collection, featuring black catsuits and high-waist dresses, didn’t match that success.

“If you don’t go 20 percent forward to make cash flow, you can’t fund the next season’s development. It’s a catch-22 as a young designer,” Laugesen said. He added that, despite having potential manufacturing and distribution licensing deals in Belgium and Italy, plus backing from Danish investors, when none of those deals could be concluded by the crucial cutoff date for the next season, he decided to put the company into voluntary liquidation at the end of July. However, Laugesen said he’s not the first, and likely not the last, independent designer to close during this shaky period. “It’s even difficult for the big houses in Paris,” he said. “I’ve heard some are down 30 to 40 percent. And it’s not only the houses that have problems: Independent retailers are in difficulty.”

“Everyone is suffering,” agreed Christian Gregersen, chief executive officer of Gallery, the Copenhagen-based designer trade show. “If I were a young designer now, I would get a steady job at a big company, go get a lot of experience and see how the business is working from inside. Nobody’s going to lend them the money, and the shops aren’t going to bring in new designers right now because they’re all going for more well-known brands.”

Laugesen, who has created collections for fast-fashion giant Topshop and eyewear for Linda Farrow, said he’s in talks with different companies. “I’m looking forward to putting my design philosophy into practice, either with my own brand with a structured, grown-up business or in the role of creative director for an existing brand,” he said.

A spokeswoman for Camilla Staerk, meanwhile, said that, while business at the eight-year-old label, which split with its founder, Camilla Staerk, in 2006, had increased in recent years thanks to well-received collections, poor sales of the spring 2009 line shown in Copenhagen in August prompted the decision. “Everybody is struggling this season,” the spokeswoman said, adding that the collection will not be manufactured.

The move will end confusion for Staerk herself, who created a label simply called Staerk after losing the rights to the Camilla Staerk moniker when she fell out with her backers and left the company. Staerk is now based in New York, where she opened a flagship for her nascent label last summer.

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