Blog: Sell-offs amid the shakeout
Leonie Barrie | 1 June 2009
The shake-out at some of the fashion industry’s best known names continued last week, with troubled firms resorting to sell-offs and bankruptcies as turmoil in financial markets stifles investment and consumer spending fails to pick up.
Leading the way, Hong Kong based apparel firm YGM Trading confirmed it has signed a letter of intent to buy British clothing brand Aquascutum, which it already makes and distributes in Greater China, Singapore and Malaysia.
The revelation follows the resignation of the 158-year-old label’s chief executive Kim Winser, after her plans for a management buyout were rejected by the firm's Japanese owner Renown. Yukio Ueda has been parachuted in as the new managing director, taking charge of the brand while a takeover is negotiated.
Renown has been trying to offload Aquascutum since last October after struggling to reverse ongoing losses and revamp its image.
Meanwhile, a Paris commercial court is mulling whether Christian Lacroix is to go into administration or be liquidated after the luxury fashion house last week declared itself insolvent. A slowdown in its core women’s wear sales and a failure to secure new financial backing are blamed – although takeover talks with an unidentified investor are also said to be underway.
The Spanish textiles unit of Dogi International Fabrics has applied for administration after failing to obtain financing, but will continue to operate while its management works on a viability plan to help the firm get through the current economic downturn. The company said it is looking to sell off some of its assets, but that its subsidiaries and joint venture partners are unaffected by the moves.
German women's wear group Escada has agreed to sell three of its four Primera Group fashion labels to Munich-based holding company Mutares AG – which will take a 90% stake in the Laurèl, Apriori, and Cavita lines. Talks on the sale of its BiBA brand are also underway. Offloading Primera is part of an ongoing restructuring at Escada.
However, plans for the sale of bankrupt Chicago-based suit maker Hartmarx seem to be stumbling. Last week it agreed to sell its assets to Emerisque Brands and SKNL North America - a unit of Indian apparel maker S Kumars Nationwide Ltd - in a deal worth US$119m. But Hartmarx’s chief lender Wells Fargo now says it opposes the deal because it does not maximise the value of Hartmarx's assets or guarantee continued operation of the company's current business.
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