Escada, the German luxury fashion brand, filed for bankruptcy protection with a Munich court, Bloomberg reported on Thursday. Escada was badly hit by the global economic downturn and had been negotiating with bondholders to restructure its debts, but the negotiations were broken off on Tuesday. Along with the recent bankruptcy of Lacroix, the French luxury clothing brand, the Escada case reveals the heavy toll the recession is taking on the high-end fashion industry.
According to French newspaper Le Monde, Italian luxury fashion brands are also suffering from serious financial woes. Gianfranco Ferre, one of the top Italian haute couture labels along with Armani and Versace, is on the verge of bankruptcy as its holding company IT Holding went under court receivership early this year. Jewelry maker Bulgari is struggling with a deficit of over 40 million euros this year, and Prada is looking for a new creditor as its financial situation has worsened. In Switzerland, watchmakers are also in a tight spot. Due to subpar sales, Zenith laid off 10 percent of its employees early this year and will soon sack an additional 70 people, one-third of its current work force, Le Monde reported.