14 DAY TRIAL // Fashion house Christian Lacroix has never made a profit in its 22 years of existence, but that has never stopped it from being one of the most popular and appreciated haute-couture names in the industry. Financial turmoil has eventually caught up with the designer house because of the decreased demand – especially in the US – and it is now forced to file for bankruptcy, Reuters informs.
Lacroix started to show the first signs of serious financial troubles as early as the beginning of last year, when the demand from stores in the US, on which the house relied to a great extent, went down considerably. Creditors are now cornering Lacroix to pay off debts, with the house being in a position in which it obviously cannot do that, so it is taking the matter to court in the hope a judge will give it the right to continue operations.
“Loss-making French fashion house Christian Lacroix has filed for creditor protection, hit hard by the global collapse in consumer spending. The fashion house, known for its colorful baroque-style dresses, said it hoped to continue to operate by getting court permission to go into administration and strike a deal with its creditors.” Reuters informs. The fate of the 125 employees currently working for Lacroix has not yet been determined, a decision pending on whether the court grants it the right to continue work as before.
“This process, which was in its final phase, has also been hit by the financial crisis and could not be concluded within the necessary deadlines. The company hopes to complete the [legal] procedures quickly and continue to develop the brand.” Christian Lacroix Chief Executive Nicolas Topiol says in a press statement. At the same time, Topiol says the most recent development can only be explained by “the consequences of the global financial crisis which has sharply hurt the luxury goods industry.”
Christian Lacroix, although not making a profit from the amazing creations it puts out, has always been a favorite with celebrities, from Christina Aguilera to Helen Mirren and Nicole Kidman. Still, it is not the only one to take a hit because of the recession: the Italian fashion industry has long applied for government assistance, while renowned jewelry brand Bvlgari has registered its first quarterly loss in a decade, reports in the US media have it.