Escada America LLC filed for bankruptcy in Los Angeles on Tuesday, marking the latest stage in the brand’s financial struggles.
The initial filing with federal Georgia bankruptcy laws court gave only the most minute details of the division’s situation. The company estimated it owed between $1 million and $10 million to a total of 100 to 199 creditors. It also listed assets of $1 million to $10 million.
Many of the company’s largest debts were for rent and were listed as disputed. The top three creditors all owed rent owing and included 717 GFC in New York, which owed $5.1 million; the Beverly Hills Wilshire Hotel, $2.5 million, and Samson Management Corp. in Queens, $1.3 million.
The Mittal family sold the broader Escada business to Beverly Hills-based private equity firm Regent in late 2019.
But the acquisition soon ran into the worst of the pandemic, which led to massive fashion disruption and a wave of bankruptcies.
WWD reported on June 12 that the brand is grappling with landlords taking over some of its North American stores and downsizing.
In September of the same year, a division in Germany filed for insolvency (its second trip to insolvency there, after filing in 2009).
At the time, Escada pinned the case in Germany on the pandemic.
âWe made great strides to improve our operations and were on track to exceed our last year results until COVID-19 swept the world,â read an internal memo. “Unfortunately, the human tragedy and economic blight caused by the pandemic has severely affected the fashion and luxury retail sectors.”
An attorney for Escada America and representatives for Regent could not be immediately reached on Tuesday.
This story will be updated as more details become available.
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