A plan to convert Escada AG's widely held preference shares into common stock will result in the founding family of this German fashion house giving up their control of the firm.

The move would dilute the Ley family's share of the company's common voting stock to 26 per cent from its current 50 per cent.

A statement from the company said the conversion would be on a one-for-one basis and would need the approval of a shareholders' meeting called for 18 September. Common stock has broader investor appeal since holders have voting rights.

Escada's first half operating profit nearly doubled to 18.3 million euros ($18.44 million) and it is on track to post a profit of 20-30 million euros in the financial year to 31 October.