Sonia Rykiel at high risk of liquidation
today Jun 5, 2019
The clouds are darkening over French fashion label Sonia Rykiel. After the rescission of the investment fund First Heritage Brands, owner of Sonia Rykiel, following financial difficulties at the fashion house, and causing the label to go into receivership last month, the very tight timeframe has not been to the advantage of the brand. The date for the submission of acquisition bids was first set for May 31, but was pushed back to June 12 to allow for any last-minute shows of interest. But just a few days away from the deadline, even with five potential buyers, no complete and significant offer has yet been formulated, FashionNetwork.com has learnt.
According to a source familiar with the matter, one single “structured” offer from someone with experience of the sector — Emmanuel Diemoz, former CEO of Balmain who unsuccessfully attempted a takeover of Carven last year — is on the table. However, as it is still unfinalised, it would be of a very small scale, with some 30 employees kept on out of the almost 200 at the label, and with an offer amount of only €500,000.
Given the weakness of the propositions, the spectre of a decision by the Paris trade court to liquidate the label is looming closer.
One last option could be for the court to allow several more days for bids to be made, if any interest is shown in the next few days, with the hope of saving more jobs and to better finance the house’s relaunch.
After several years of declining sales and heavy investments, the fund First Heritage Brands, owner of the label since 2012, decided to cut its losses. The label will only be financed to until the end of June. The label’s revenues stood at €32 million in 2018 (less than half its 2012 turnover), and has 178 employees — including at subsidiaries — of which 150 are based at the label’s headquarters in Paris. One foreign subsidiary already closed, in the United States, last month, and since then its French and British stores have also closed their doors. Some 15 monobrand stores remain, in addition to a presence in 200 international retailers.
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