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By NICOLAS VAUX-MONTAGNY
Associated Press Writer
Court calls for massive layoffs at Lacroix70 days ago
(AP:PARIS) Nearly all the employees at bankrupt French fashion house Christian Lacroix are likely to be laid off after a Paris commercial court ruling on Tuesday cleared the way for a massive restructuring.
Under the ruling, about 100 employees are to be laid off and the label's legendary haute couture and ready-to-wear lines are to be shut down. The brand will still exist as a legal entity, with some 11 employees managing its license agreements, for perfume and paper products.
In May, the 22-year-old brand known for its wildly expensive gowns in sumptuous colors, said it had launched insolvency proceedings. It blamed its financial straits on "the consequences of the global financial crisis which has sharply hurt the luxury goods industry."
Simon Tahar, a lawyer for Lacroix, hailed the decision, saying it will allow the house to reorganize in hopes of someday relaunching the fashion lines.
"It's a wise decision and I'm happy the brand is continuing," he said.
A sheik from the United Arab Emirates had expressed interest in buying Lacroix and was expected to offer euro70 million ($102 million) in new funds, but he failed to provide the necessary financial backing.
The Italian group Borletti had previously been considered the most serious candidate to take over Lacroix, but later withdrew, and the offer of another possible buyer, Bernard Krief Consulting, was deemed "unsatisfactory and disappointing" by Lacroix's court-appointed administrator.
The Falic Group, a U.S. duty-free retailer, bought Christian Lacroix from the Paris-based luxury goods empire LVMH Moet Hennessy Louis Vuitton in 2005. The group had had big plans for Lacroix's expansion in the United States, but in 2008, Christian Lacroix posted a loss of euro10 million.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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