Escada SE files for insolvency

Fashion company Escada SE commenced insolvency proceedings at the Munich District Court last week, citing the "economic plague" caused by the coronavirus, although operational woes are widely thought to predate the pandemic.  

The designer clothing company has filed for insolvency in its original home in Germany, with plans to limit corporate operations in the country and further limit its retail presence.  It is expected to impact the roughly 180 corporate employees left in Germany. The bankruptcy filing relates to Escada SE in Germany and does not apply to other companies in the group.  

The luxury women’s fashion brand had already suffered from declining sales in recent years. The company explained that these were once again significantly increased by the consequences of the coronavirus pandemic. Escada had already filed for bankruptcy in 2009, after several changes of ownership, the US investor Regent took over the company in 2019.   

Management aims to continue business operations as part of the restructuring that has already been initiated, explained Escada. The company will “immediately” start negotiations on the pre-financing of the bankruptcy settlements for the 180 employees concerned atitsat its headquarters and in eight stores in Germany.   

The Munich District  Court has appointed Christian Gerloff, a partner at Gerloff Liebler Rechtsanwälte, as temporary insolvency administrator.  

Founded in 1978 by Margaretha and Wolfgang Ley, Escada’s apogee was in the 90s, with supermodels including Claudia Schiffer, Linda Evangelista, Cindy Crawford and Naomi Campbell modeling its collections.  Today the Escada Group operates in 24 countries throughout North America, Europe and Asia. With around 1,100 points of sale, Escada is present in 80 countries worldwide.