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French Government Still Searching for Lacroix Buyer
December 02nd, 2009 @ 00:42 AM - Paris
France’s Industry Ministry has vowed to keep up the search for a buyer for Christian Lacroix, even as a French court here ruled that the deeply troubled couture house should undergo a massive restructuring that will lay off about 100 employees.
The Commercial Court of Paris effectively decided that Lacroix would shift to being a licensing business, after it ruled that none of the offers to buy the Paris-based fashion company were credible.
Under Tuesday’s ruling, the house must close down its ready-to-wear business and couture division, meaning Lacroix will be absent from the upcoming Paris couture season in January for the first time since his debut models show in Paris in July 1987 catapulted him to instant fame.
However, Industry Minister Christian Estrosi insisted in a statement that the decision “did not put into question the possibility that a buyer could acquire all or part of the company and its staff in the next few weeks.”
Estrosi, who plans to meet with Lacroix “in the next few days,” noted that the house was, in part, the first victim of the Dubai financial crisis, as one of the bidders for the company was Sheik Alhassan Bin Ali d’Ajman.
“The minister is aware of the financial climate in Dubai, which evidently is susceptible to slow down the possibility of a bid by the Sheik,” read Estrosi’s release.
Back in May, Christian Lacroix SNC filed for protection with the Commercial Court, as it desperately sought to avoid bankruptcy and entered the French equivalent of bankruptcy protection.
A trio of possible suitors all failed to mount a bid that was convincing enough for the Commercial Court. Besides Sheik Alhassan, French turnaround firm Bernard Krief Consulting could not produce enough financial guarantees, while, after initial interest, Italy’s Borletti Group, owner of the Printemps and La Rinascente department store chains, dropped out of the running.
However, Lacroix’s CEO Nicolas Topiol told reporters that the house’s owners, the Falic family, would continue to search for a possible buyer, and the chairman of Bernard Krief, Louis Petiet, indicated his firm hoped to mount another bid.
The immediate effect of the ruling is that Lacroix must now search for a manufacturer to license its women’s ready-to-wear and accessories collections, and shortly shutter the brand’s three boutiques, one each in Paris, New York and Las Vegas.
Lacroix’s lawyer Simon Tahar told Paris daily Le Figaro that he had requested the court grant a delay to allow the Sheik more time to produce the needed financing. The Sheik planned a 100 million euro, or $150 million, investment to write off all the existing debts and finance future development, Tahar said.
The Falics, who made their fortune with the Duty Free Americas chain, acquired Lacroix in 2005 from LVMH, whose chairman Bernard Arnault had bankrolled the house from the beginning.
Ironically, given this week’s ruling, the first management decision of the Falics after taking over was to discontinue the Bazaar ready-to-wear and Christian Lacroix Jeans collections in what proved a disastrous strategy of repositioning the brand further up-market.
After Lacroix’s 2008 turnover declined to 30 million euros, or $45 million, with a loss of 10 million euros, or $15 million, the Falics began a frantic search for a buyer, without, however, any success.
When Lacroix opened his own business in 1987, he was the first new couture house in 25 years. He immediately became a darling of the international fashion media – winning a Time magazine cover - with his brilliantly evocative fashion and brightly hued clothes, influenced by his native Arles and a Provencal sense of off-beat color. But though he won ecstatic reviews and was highly influential, few consumers bought his dazzling but difficult to wear clothes. Moreover, his debut perfume, C’est La Vie, flopped despite an expensive 1990 launch.
This latest ruling raises the question whether the house will be able to afford keeping on the 58-year-old designer, who became best known in the English-speaking world for the being the central fashion obsession of Eddy Monsoon, the main character in the U.K. comedy series “Absolutely Fabulous.”
In the past few years, Lacroix has diversified his interests, using his own private company XLCX to design costumes for opera and the Comedie Francaise theater, uniforms for Air France and the dining cars of French high-speed trains.
Now, his fashion house is to be reduced to a mere dozen staffers, even as its official Web site still carries a job application window for possible candidates. And, the court documents revealed, Lacroix is actually owed 1.2 million euros, or $1.8 million, by Christian Lacroix SNC, i.e. he is today one of the creditors of the fashion house he founded in such glory 22 years ago.