The Paris Court of Commerce approved a restructuring plan for Christian Lacroix that will see the ailing fashion house end its flamboyant haute couture line, cut 100 jobs and pay off its debts over 10 years. The court accepted the turnaround plan by Christian Lacroix's owner, the US-based duty free company Falic Group, which bought the company from LVMH Moet Hennessy Louis Vuitton in 2005.
The plan "will put the company back on a course of stability", said Simon Tahar, a lawyer for Falic Group and Lacroix, Bloomberg reported. "It's a realistic plan." Of the label's 110 staff, 10 would be maintained to oversee its trademark and to develop its licenses, said a spokeswoman for Regis Valliot, the court-appointed administrator of Christian Lacroix. "The haute couture is stopped and the ready-to-wear can go on with new licences," she said.
Sheikh Hassan bin Ali al Nuaimi, a nephew of Sheikh Humaid bin Rashid, the Ruler of Ajman, had emerged as the front-runner to acquire the company in October with a formal offer that would have saved the jobs of the majority of Christian Lacroix employees and preserve both its haute couture and ready-to-wear lines. The French firm Bernard Krief Consulting also made a bid of ?100 million (Dh553m) for the fashion house, of which ?12m was an investment by Midex Airlines, a cargo carrier based in Abu Dhabi.
Doubts were cast over the bids after Mr Valliot said last month that they failed to submit financial guarantees to prove their liquidity to support their proposals. "The time to make the decision is useful for the bidders to justify their money," Mr Valliot said on November 17. "If not, it will be the continuation plan of the shareholders and 100 people fired." Sheikh Hassan yesterday denied that he failed to provide the guarantees and proof of liquidity to back his offer.
"From the beginning we provided all the paperwork they asked of us, [including] the guarantees," he said. "We would have had the readiness to revive the company and strategy, and maintain the employees - and I proposed to build a bridge between East and West." Christian Lacroix has not made a profit since it was set up by Bernard Arnault, the chief executive of the luxury retail conglomerate LVMH, in 1987. The label booked a ?10m loss last year on sales of ?30m.
The global financial crisis has caused a severe downturn in luxury spending, forcing many fashion houses to abandon their expensive haute couture lines and concentrate on their ready-to-wear divisions. * additional reporting by Hadeel al Sayegh * with Bloomberg @Email:firstname.lastname@example.org