German fashion group Escada has found itself a buyer. On 5th November the insolvency administrator of Escada AG signed the sale and transfer agreement with the Indian Mittal Trust. The execution of the agreement includes all key assets of the German company covering its operative business as well as shares in Escada’s subsidiaries will be transferred to the Trust.
For the moment, the Board of Management and Mittal have agreed to follow the business strategy set in mid-2008 securing continuity of the operative business. The transaction provides for a transfer of Escada’s business operations, including employees as well as worldwide brand rights, production facilities and the sales and distribution structure to the Trust. The transaction is subject to customary antitrust approvals.
On the execution Bruno Salzer, CEO of Escada AG, commented: “I’m relieved we can put these uncertain times for our employees, customers and suppliers behind us. We found an ideal partner in the Mittal Family Trust. All that counts now is the future.”
Escada was founded in 1978 by Margaretha and Wolfgang Levy and developed into an international fashion group for women’s apparel and accessories until recently. A couple of years ago the company started to struggle with declining sales numbers, and in fiscal year 07/08 the group’s loss after taxes came to -70.3 million euros after -27.0 million euros in the previous fiscal year. Today Escada has 182 own shops and 225 franchise shops/corners in more than 60 countries.
According to Escada it was rather difficult to come to a suiting agreement for the complex transaction, of which no financial details are further published. Two and a half months didn’t seem to be a long time to find the right solution for the brand.
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