Escada, the German prêt-à-porter brand founded by Wolfgang Ley 32 years ago, which was also one of the big players in the fragrance industry a few short years ago, filed for bust the other day after a free-falling plummet in the second trimester of 2009. According to Reuters however this was no news as they had published shares taking a hit as far back as February 2008: "Escada, rumoured to be a takeover candidate, said sales dropped 9.1 percent to 142.1 million euros ($214.6 million) in the quarter ended January. Earnings before interest, tax, depreciation and amortisation (EBITDA) sank 68.5 percent to 6.8 million.UniCredit analyst Volker Bosse said he expected sales of 158 million euros and EBITDA of 19.9 million."We see the company as having a higher risk profile than its peers," said Bosse, who rates Escada a "sell". Escada trades at about 12 times 2009 earnings and the sector average is 14.5." Some attempt at salvaging the crumbling brand had been made in June 2007 when Chief Executive Jean-Marc Loubier took over and there was "a five-year plan to win market share and raise profits by expanding into higher-margin accessories, shutting some stores and renovating others". But Escada's shares leapt 15 percent on Nov. 26 on rumours of a bid by French group Louis Vuitton Moet Hennessy. 2009 was even bleaker... Hiring Michael Boernicke, the former chief executive of German pay-TV broadcaster Premiere as finance chief last February, replacing chief financial officer, Markus Schuerholz, the results weren't up on a par with expectations.
The company is currently in talks about a takeover. Judicial administrator Christian Gerlof is set to announce the news in a few days. Fashion designer Wolfgang Joop, as well as Nickolaus Becker, a Munich lawyer, expressed interest in taking over the reins at the fashion house. Offers are rumoured to be running into the 9 figures (that's in euros).
However Escada is keeping up images by engaging newly popular Olivia Wilde, a TV star from series Dr.House, to front the newest Escada fragrance for women, Desire Me.
Desire Me by Escada follows Incredible Me from 2008 and is a fruity floral gourmand with notes of citrus, mandarin, green notes, peony, dark chocolate and coffee notes.
In a quote ms.Wilde said:
"For me, Esacada stands as a synonym to style, refinement and sensuality. I love being considered an Escada woman and I think the majority of women would aspire to possess the admirable qualities that the perfume incarnates so perfectly".
Yeah, yeah...The show must go on!
Related reading on Perfume Shrine: Market news, luxury and tendencies July '09, Luxury market amidst the Recession and Other Bedtime stories