Germany’s Escada to file for bankruptcy
FRANKFURT - Debt-laden German fashion company Escada AG said it will probably file for bankruptcy protection Thursday.
FRANKFURT - Debt-laden German fashion company Escada AG said it will probably file for bankruptcy protection Thursday.
The Munich-based company, once one of the world's biggest fashion brands, had hoped to use a bond exchange to quickly reduce euro100 million ($142 million) of the company's debt.
The bond exchange, however, was approved by only 46 percent of the holders out of the 80 percent necessary to execute the swap. The swap was also necessary for a wider restructuring at the company.
Escada said it would probably file for bankruptcy protection on Thursday, but gave no further details.
It said the bond situation was "regrettable."
A plan to raise euro30 million more in capital through the company's bigger investors had been contingent on the bond exchange going through, as was a credit extension of more than euro13 million.
Escada, famous for women's apparel and accessories, posted euro528 million in sales in fiscal 2008, but a net loss of euro70 million. In the first half of the fiscal year ending in April, it lost euro92 million.
Escada operates 182 of its own shops and 225 franchise shops in more than 60 countries, employing about 2,300 people - 600 of whom are in Germany.
Shares of Escada were 56 percent lower at euro0.73 in late Frankfurt trading Wednesday.
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