Ittierre SpA, the young lines division of IT Holding SpA, has been placed in administration so that it can stay in business while being restructured.

The decision was reached after the unit, which is licensed to produce and distribute ready-to-wear under the VJC Versace, Versace Sport, Just Cavalli, C'N'C Costume National and Galliano brands, ran out of funds to pay its licensors.

IT Holding SpA, which also owns the Gianfranco Ferre fashion label, last week said it needed new credit facilities to pay suppliers for delivery of its spring/summer and autumn/winter collections and that a delay in royalty payments has also created tension with the licensors.

The firm, which has twice been forced to postpone a loan repayment, also said it had received an expression of interest from a foreign fund, which includes a capital increase and the repurchase of a bond.

In a statement today (9 February), the Milan-based company added that the bankruptcy order may be extended to the whole company since its senior notes become "immediately redeemable" if a subsidiary falls into administration.