PARIS — Lingerie firm Lejaby has filed for the French equivalent of Chapter 11 bankruptcy protection with the commercial court in Lyon, France.
This story first appeared in the October 31, 2011 issue of WWD. Subscribe Today.
The company manufactures the Lejaby, Elixir and Rasurel lingerie, corsetry and swimwear brands.
An employee for the company, who spoke on the condition of anonymity, said the firm has been given six months to find a sustainable solution to its cash-flow problems. In 2010, Lejaby registered a loss of 2.7 million euros, or $3.6 million at average exchange rates for the period.
“It’s a breath of oxygen for us,” said the employee, noting that the company, which also produces the Nina Ricci and Christian Lacroix lingerie licenses, plans to maintain the production and delivery of its collections.
Faced with stiff competition from mass market brands as well as a fragile local multibrand network, the company shuttered three of its five factories in France last year and trimmed 30 percent of its workforce. At that time, 30 percent of products sold by Lejaby were still produced domestically, compared with products manufactured by competitors in France, which averaged zero to 5 percent.
Over the 2007 calender year, the firm’s multibrand distributors saw sales plummet by 25 percent.
Lejaby, which was purchased from Warnaco Group Inc. in 2008 by Austrian firm Palmers Textil AG, is based in Rillieux-la-Pape on the outskirts of Lyon.