On Tuesday, a Paris court approved a restructuring plan for Christian Lacroix that will likely put an end to its haute couture and pret-a-porter clothing operations. The Times of London mourned that “the house of Christian Lacroix was reduced to little more than a small trading office as it crumbled under the weight of debts and losses.”
Christian Lacroix was a part of the French luxury giant LVMH Moët Hennessy Louis Vuitton, before being bought by the Falic family, owners of Duty Free Americas, a retailer with stores at U.S. airports and border crossings.
Lacroix was placed under creditor protection in early June after unpaid bills piled up and debts increased. The fashion house has not made a profit since it was founded 22 years ago. In 2008, Lacroix racked up a loss of €10 million, on revenues of €30 million while orders for its 2009 women’s ready-to-wear summer collection have been down 35%.[more]
It didn’t look good, and when two potential buyers, Hassan bin Ali al-Nuaimi and Bernard Krief Consulting, missed a deadline to produce financial guarantees backing a takeover of the company, it was pretty clear what would happen.
The Falic family has created a turnaround plan that consists of closing down Lacroix’s haute couture and pret-a-porter activities, though the licensing contracts for accessories and perfume will be kept up and running. Out of a staff of 120, only 11 workers will be retained, but the court ruling does not mean that all is lost; prospective buyers can negotiate directly with the Falic group.
LVMH recently won its case against eBay. I hypothesize they’ll be back in the picture real soon with some money to burn.