Regent again:
Escada headquarters in Munich (at the time of the first bankruptcy in 2009)
Photo: Andreas Gebert / dpa
When
Christian Gerloff
stepped in front of the staff of the once dazzling fashion company Escada, based in Aschheim near Munich, on Thursday afternoon, many did not know whether to be happy about the messages that the insolvency administrator had to announce.
The good news: it goes on.
After the second bankruptcy, Escada gets a new chance within a few years - possibly the last.
The bad: There are severe cuts, the sad rest will be taken over by previous owner Regent, a controversial US investor in whom many have lost confidence.
105 of the 180 employees have to leave, seven of the eight remaining stores in Germany have to close.
Only the branch in Munich will remain - at least for the time being.
In the other shops, Gerloff is now trying to sell the remaining goods before pulling the plug at the end of February.
A disaster for the image of a luxury brand.
Access after several deadlines have passed
2020 ends with a horror record for Escada.
Corona, the bankruptcy and the lack of money in the collection are likely to halve sales.
How Regent Escada will realign it remains questionable.
So far, the Americans have acted like gamblers.
The insolvent Escada SE is the heart of the group, but the trademark rights are held by a management company called Margaretha and thus remained in the possession of Regent.
Without access to the trademark rights, insolvency administrator Gerloff was faced with the choice of either selling the excused company back to Regent or finally closing it.
And Regent took advantage of that, letting one deadline after the other slip by and only struck when Gerloff wanted to pull the rip cord.
A smart move to lower the purchase price - but the necessary further development of the collections suffered massively as a result.
The already difficult restart, for which Regent will take over the design and sales teams in December, will not be any easier.
Now the Americans should actually invest heavily.
It is unclear whether they are ready to do so.
Neither Gerloff nor Regent could be reached for comment.
The Americans caused a stir with dubious methods in the run-up to the bankruptcy filed at the beginning of September.
Money for suppliers only against lawsuit
Owner
Michael Reinstein took
over Escada from
Megha Mittal
(44)
in autumn last year and
outdid
other interested parties with a guarantee of existence until December 31, 2021.
The daughter-in-law of the Indian steel magnate Lakshmi Mittal had not succeeded in about a decade in realigning the luxury tailor for women’s fashion.
In 2018, sales fell by 3 percent to 204.3 million euros, and the operating result (EBIT) dropped to minus 31.3 million euros.
In 2019 the situation worsened again.
With a tough austerity course, Reinstein wanted to achieve a black zero in the current year and use his contacts to Hollywood stars to bring back the glamor of bygone days.
As the manager magazin reported in April, around 60 employees had to leave the headquarters at the beginning of the year.
A little later, suppliers only received money if they threatened to take legal action.
Only bills that Regent issued via its own service companies such as the IT service provider MCO were paid smoothly.
The employees barely got to see Reinstein, the management he appointed never appeared in Aschheim.
Perhaps this only existed on paper.
A phantom tour
After the financial juggler refused
to remove
the retired management duo around CEO
Iris Epple-Righi
and CFO Torsten Dühring from the legal notice and the commercial register for
months,
two women from South Africa found themselves there.
When some employees started to google for their new bosses, they found neither vita nor photos, with one exception: Under "Aletta Catharina Britz", the name of one of the two managing directors, there is a photo from South Africa showing her name and date of birth - on a tombstone.
After all, the date of death has not yet been engraved.
Whether it is a fake or a strange joke remains to be seen.
Reinstein does not comment on this.
The result is beyond dispute: at the beginning of September the coffers were finally empty.
At the time, a letter to the workforce said: "In the past ten months, Escada has begun its path to profitability in order to set a new standard in the luxury industry."
Then with Corona "a plague" hit the entire luxury fashion industry.
A few days later, Reinstein had a spokesman reported that Regent continued to believe in Escada.
"We have replaced the obsolete technology and invested in online sales. We are therefore optimistic that we can transform Escada into an omnichannel luxury brand that operates in 60 countries around the world."
If he's serious, he'll finally have to deliver. Otherwise there is nothing left of the company but a nice memory of the 90s, when Escada rose to be the darling of the in-crowd and generated over 700 million euros with numerous subsidiaries. Since then, however, it has been going steeply downhill. In 2009 Escada had to file for bankruptcy once, and the company is unlikely to survive a third time.