Escada America Files for Chapter 11 Bankruptcy
Escada America LLC filed for bankruptcy in Los Angeles on Tuesday, marking the latest leg in the brand’s financial struggles.
The initial filing in federal bankruptcy court gave only the barest details of the division’s situation. The company estimated it owed $1 million to $10 million to a total of 100 to 199 creditors. It also listed assets of $1 million to $10 million.
More from WWD
Many of the business’ largest debts were for rent and were listed as disputed. The top three creditors were all due rent and included 717 GFC in New York, which is owed $5.1 million; the Beverly Hills Wilshire Hotel, $2.5 million, and Samson Management Corp. in Queens, $1.3 million.
The Mittal family sold the broader Escada business to Beverly Hills-based private equity firm Regent in late 2019.
But the acquisition quickly ran headlong into the worst of the pandemic, which brought a massive disruption to fashion and a wave of bankruptcies.
WWD reported in June 2020 that the brand was struggling with some of its North American stores taken over by landlords and its corporate headcount reduced.
In September that year, a division in Germany filed for insolvency (its second trip to insolvency there, having filed in 2009).
At the time, Escada pinned the filing in Germany on the pandemic.
“We have made great strides to improve our operations and had been on track to exceed our results from the last fiscal year until COVID-19 swept across the globe,” an internal memo read. “Unfortunately, the human tragedy and economic plague caused by the pandemic has acutely affected the luxury fashion and retail sectors.”
A lawyer for Escada America and representatives for Regent could not immediately be reached on Tuesday.
This story will be updated as more details become available.
More from WWD:
Omicron Hits Retail Sales Reports, Threatening Sales and Profits
Jaanuu Scores $75 Million Eurazeo Investment
ThredUp Names HR Expert Coretha Rushing to Board
In Fashion: The Inflationary Mood of Wary Consumers
Sign up for WWD's Newsletter. For the latest news, follow us on Twitter, Facebook, and Instagram.