The Escada luxury fashion company, announced it will declare bankrupcy by the end of this week, as the plans to save the company and its 2,300 employees and restructure its debts have failed.
Company officials reported losses worth €70.3 million in the previous fiscal year, compared to €27 mln in the 2007 financial exercise, and a 15 percent decline in net sales in the 2008 fiscal year. Moreover, Escada shares lost one third of their value Tuesday on the Frankfurt stock exchange.
The latest alarm signal came in March, when the level of losses in the previous fiscal year indicated that Escada may survive five months at most, unless creditors approve the restructuring program.
Although the specialists of the Bain&Company consultancy firm announced that the luxury market will slide three-seven percent in 2009, from €175 billion in 2008, the financial result of the Hugo Boss group in the first six months of this year contradicts the optimistic forecast of consultants.
