Regent-backed Escada files for insolvency

The filing solely affects Escada SE, Escada's German subsidiary, which employs 180 people and has eight German stores. Its other units are not affected by the insolvency proceedings.

A spokesperson for Escada told Unquote: "While Escada is a global company, it is and always will be a German fashion house, with several functions based in Munich. We have no intent to move key operations such as wholesale, production and retail operations out of Munich."

The spokesman also confirmed that the business will continue to operate, adding: "Over the last 10 months, Escada has been on a journey to drive profitability and set a new standard in luxury. Escada has made great strides to improve our operations, and had been on track to exceed our results from the last fiscal year until Covid-19 swept across the globe."

The spokesperson added that the company has made a number of recent investments in its growth and development, including "a seven-figure investment in a new, global point-of-sale and inventory system" at the end of August, as well as investments in its e-commerce platform.

The business has also renegotiated and signed a number of leases, including a two-year lease for a site in Beverly Hills, and is working on the development of its site in Harrods, London.

Allen & Overy advised Escada on the filing, according to the court document.

Christian Gerloff of Gerloff Liebler Rechtsanwälte has been appointed as provisional insolvency administrator. The firm also advised Escada on its insolvency proceedings in 2009.

The company aims to continue its business operations during the insolvency proceedings, according to a statement.

Regent acquired the business from the Mittal family in November 2019. The family had originally acquired the company from insolvency in December 2009 in a deal reportedly valued at €60m.

Founded in 1978, Escada makes sales both online and in stores across Germany, and operates in 60 countries in total. It reported revenues of €113.6m in 2017, compared with €123.2m in 2016, according to its financial statements for 2018. The company expected its turnover for 2018 to decrease further to €106.7m.

Escada reported 2017 EBITDA of -€7.5m and expected to report 2018 and 2019 EBITDA of -€9.2m and -€600,000 respectively.

Regent could not be reached for comment at the time of publication.

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