Escada

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ESCADA SE

logo
legal form Societas Europaea
founding 1976
Seat Aschheim , Germany
management Michael Reinstein
Number of employees 379 (2015)
sales EUR 113.6 million (2017)
Branch Fashion
Website www.escada.com

The Escada SE is a former publicly traded luxury fashion company based in Aschheim in Munich , the ready-to-wear -Damenoberbekleidung in the luxury segment as well as accessories making (bags, shoes, small leather goods) and sold. In Stock and fragrances, eyewear and watches and jewelery are sold under the name Escada sold.

The company founded in 1976 by Margaretha Ley (1933–1992) and her husband Wolfgang, whose first complete fashion collection for women was presented in 1978, was considered in the 1980s - after the Steilmann Group and before Hugo Boss - as the “second largest European fashion manufacturer” and In the early 1990s "as the largest women's fashion company in the world". Escada went public in 1986 and was successful in the 1980s and early 1990s with elegant women's fashion in the upper price segment. In November 2009, an investment company owned by Megha Mittal , daughter-in-law of Lakshmi Mittal , bought the company. In September 2019 it was announced that Megha Mittal plans to sell Escada. The Californian financial investor Regent has owned the fashion brand since the end of October 2019.

history

Foundation and years of success

Escada was founded in 1976 by the Swedish model Margaretha Ley , an opening formed in Stockholm in the Royal Court seamstress, and her husband since 1974, the German entrepreneur Wolfgang Ley, in Munich founded .

The brand name Escada goes back to the name of an Irish racehorse. The company initially operated officially as SRB Verwaltungsgesellschaft mbH ; Margaretha Ley's first husband with the surname Srb had owned the knitwear factory Srb GmbH in Munich , which Margaretha Ley continued to run after his death. At the end of 1976 the company was renamed SRB GmbH Escada - Sporty Elegance .

In 1978 Escada presented the first complete fashion collection for women. While Margaretha Ley took care of the creative work as chief designer, Wolfgang Ley took over the financial part and sales. In the 1980s, the Escada brand quickly made a name for itself with Margaretha Ley's colorful designs made of high-quality fabrics in the area of ​​upscale evening and business fashion for women. Gold buttons and bright color combinations have become synonymous with Escada fashion. In 1980, after the first very successful years, the Leys launched the high-priced main line Escada, the second line for women, Laurèl, in the upper mid-price segment, for which their own shops were opened from the end of the 1980s. With another line called Crisca , for which there were also own shops, other customers were addressed later. In 1982 the US market was opened up with its own Escada branches. Two years later, in 1984, the company was converted into a stock corporation and went public in 1986 as Escada AG with a share price of DM 560 in Frankfurt am Main, with the Leys holding 76% of the company's shares. In the following years Escada recorded rapid growth. In 1990, the company's own Escada Beauté Group launched the first Escada perfume called Escada . A men's fragrance, Escada Homme , followed in 1993. From 1993, Escada started the tradition of offering a limited summer fragrance every year that is no longer produced after the respective season. The international boutique network had been expanded extensively by the early 1990s and included shops in the most important European cities, in New York and in Japan. From the late 1980s onwards, supermodels such as Linda Evangelista , Claudia Schiffer , Cindy Crawford , Tatjana Patitz or Christy Turlington were associated with Escada through large-scale advertising campaigns or catwalk appearances at fashion shows . The prominent Escada customers in the following years included stars such as Princess Diana , Kim Basinger and Demi Moore .

Expansion and times of crisis

Panorama shot: interior of an ESCADA store

Margaretha Ley died of cancer in 1992. After the death of his wife, Wolfgang Ley continued to run the company on his own. Urged by the banks to do so, Ley took over other fashion companies from 1987 such as Kemper (with a Cerruti license, from 1988), Schneberger (from 1987), Blousen-Neumann (from 1991 to 1999) or the Californian luxury fashion brand St. John for $ 50 million (from 1990, sold again in 1993). In 1991 sales were 1.4 billion DM. During this time there were around 200 Escada stores worldwide.

From 1992 Escada got into a severe crisis, also due to international recession waves and exchange rate fluctuations, and reported losses of 120 million DM for the 1992 financial year. The company had grown too rapidly under Wolfgang Ley's leadership; the luxurious Escada boutiques in major international cities weighed on the balance sheet. In 1993 there were rumors of bankruptcy in the press . The Laurèl stores were closed and the Crisca brand was dissolved.

The already extensive Escada range had meanwhile been expanded to include accessories, handbags, shoes and jewelry. From the beginning of the 1990s to the beginning of the 2000s, the group's various Escada clothing lines pursued the concept of the “House of Escada” - this is how the international Escada flagship stores were also called. The American Brian Rennie (* 1963) was appointed chief designer in 1994. Under Rennie, the sporty and somewhat cheaper second line Escada Sport was established, which still exists today. In the mid-1990s, the crisis appeared to be over. Peter Zühlsdorff, CEO of Wella until 1995, became a supervisory board member at Escada in 1998 ; he should support Wolfgang Ley and shape the transition into the post-Ley era. In 1998 Escada Beauté also acquired the French perfume manufacturer Parfums Grès (sold in 2001). 1999 was Schneberger GmbH in Primera AG and renamed the subsidiary in her blouse Neumann and the brands Apriori , Cavita bundled and more. At the end of the 1990s, the Escada Group employed around 4,400 people. In 2000, Rennie and Wolfgang Ley received the Burda Bambi in the fashion category .

From 2001 Escada initiated a strategic realignment focusing on the core brands. In 2002, in the wake of a renewed global economic downturn from the beginning of the 2000s, the perfume division Escada Beauté was sold to Wella and the perfume business was continued through licenses. In the same year, following pressure from international investors, Escada preference shares were converted into ordinary shares . At that time, Wolfgang Ley still held over 50% of the shares in Escada. In 2003, the US private equity firm HMD Investment Partners LP acquired shares of 27.0% in Escada for 45 million euros. Wolfgang Ley's shares in Escada sank to around 10%. In 2004 Escada sold its stakes in Kemper and the associated fashion brand Louis Féraud (insolvency 2004). The now independent Laurèl GmbH was transferred in 2004 to the Primera Group within the Escada Group. Also in 2004, under the name Escada Kids , children's fashion for girls was brought onto the market under license (discontinued in 2009 for the 2010 season). In the 2004 financial year, Escada returned to profitability. In 2005, however, the company issued a bond with a volume of 200 million euros due to capital requirements . By the early 2000s at the latest, Escada had the image of a somewhat old-fashioned fashion brand for women of advanced age, at least in Germany, which seriously damaged sales. The export share during this time was 90%.

Escada without the founders

Escada store front

The management of HMD as well as Zühlsdorff finally convinced the co-founder Wolfgang Ley to only be available to the company as "Creative Chairman" and consultant and pushed him out of the operative business. Ley resigned as CEO on January 31, 2006 and handed over the office to Frank Rheinboldt (* 1967), who cut the dividend as one of the first measures . In May following Rheinboldt left the company, among other things, due to a conflict with the new main shareholder Rustam Aksenenko from Russia, whose company Finartis had owned around 25 percent of the shares since the beginning of 2006. At Aksenenko's insistence, his successor was Jean-Marc Loubier, a Frenchman who had previously worked at LVMH ( Louis Vuitton ). Aksenenko tried to implement a quick turnaround at Escada . In the following year there were disputes about Aksenenko in the Escada management bodies, who had independently commissioned an analysis of Escada by the management consultancy Bain & Co. , which was subsequently made public.

In October 2006, Brian Rennie was released from Escada after disagreements that were later heard in court. Rennie's successor was the Italian Damiano Biella (* 1971), a former designer at Gucci , Carolina Herrera and Valentino . His collections were praised by the professional world, but were not particularly successful commercially. In 2007, an Escada collection co-designed by the artist Stefan Szczesny appeared . Biella was taken on as Creative Director in 2009 and he only worked in an advisory capacity until 2011. Long-term Escada employees took over the head design of the collections.

In 2008 the Tchibo heirs Michael and Wolfgang Herz took over around ten percent of the shares in Escada and replaced the CEO Jean-Marc Loubier with Bruno Sälzer, a confidante of Michael Herz, who had been Hugo Boss’s CEO for six years . The Herz brothers subsequently increased their share to around 25%. Sälzer was supposed to rejuvenate the collections and to bind a younger clientele to Escada, as well as to coordinate the international brand presence of Escada in the different sales markets.

Crisis and bankruptcy proceedings 2009

Escada Sport fashion show, Berlin Fashion Week , 2012

On March 17, 2009, Escada CFO Markus Schürholz announced that the company had accumulated a loss of 70.3 million euros in the past financial year. At that time there would be a financing requirement of 30 million euros, which should be raised through a capital increase . In July 2009 the loss was estimated at 91.7 million euros. The consequences of the international financial crisis from 2007 and the associated slump in sales on the US and Asian markets did not bypass Escada.

In May 2009, Escada sold the subsidiary Primera (with the brands Apriori , Biba , Cavita and Laurèl ) to the Munich investment company Mutares AG . However, in October 2009 Escada's insolvency administrator did not agree to this sale and terminated the purchase agreement. Then took over the Munich-based private equity firm Endurance Capital that "a better price and a better concept" had commanded, the company Primera with the brands Apriori , Cavita and Laurèl (bankruptcy 2016). These compulsory sales, however, did not produce the expected proceeds.

Escada filed for bankruptcy on August 11, 2009. The creditors should contribute 120 million euros to the restructuring without participating in the company. Around half of the creditors, especially pension funds and small investors, rejected this. The planned capital increase of around 30 million euros was then refused by the owners or shareholders. On August 13, 2009, the preliminary bankruptcy administration was placed on Escada and the bankruptcy proceedings were opened on November 2, 2009. As a result, numerous major shareholders (including the Herz brothers, Aksenenko, Sälzer and supervisory board member Claus Mingers) sold some or all of their Escada shares at high losses. On November 5, 2009 Escada was sold to Megha Mittal , daughter-in-law of the Indian steel magnate Lakshmi Mittal , after examining offers from several investors - including the son of the company founder, Sven Ley . In the press there was talk of a purchase price of 60 million euros. Escada’s listing was canceled in the wake of bankruptcy. Shortly before the bankruptcy, Escada had 2300 employees worldwide, around 500 of them at the headquarters in Aschheim near Munich.

Realignment from 2010

From 2009, Escada was primarily present with the Escada Sport brand at the Premium fashion fair in Berlin and from 2011 for several seasons with catwalk shows at the Berlin Fashion Week . At the end of 2012, the Escada designer since 2003, Daniel Wingate, was appointed creative director. In spring, the company put an online shop on its website for the first time . The annual turnover of Escada in 2011 was around 300 million euros; The breakeven point was only just missed, and a positive operating result was expected for 2012. The company has not published any figures since the takeover by Megha Mittal. A net loss of almost 30 million euros for 2012 was discussed in the press. The German market contributed around 10% to total sales in 2014.

At the end of 2012, Escada was operating - in addition to the more than 90 own and franchised worldwide Escada boutiques, including 13 in the USA - 19 of its own stores in Germany, seven of which were official outlet stores in factory outlet centers. As of 2012, Escada was available at 1,100 sales outlets in 80 countries worldwide. Escada focuses on the US, Germany, Spain, Russia, Japan and, above all, China markets. The Marketing Club Munich awarded the Escada company the end of 2012 with the marketing prize for outstanding marketing management under Sälzer's leadership after the bankruptcy.

Sälzer's Escada contract expired at the end of 2014. In January 2015, the US American Glenn McMahon, a former manager at Dolce & Gabbana and Tamara Mellon , was appointed CEO of Escada in Munich. On July 10, 2015, Escada announced that McMahon would be leaving the company for personal reasons at the end of July 2015. As of September 1, 2016, the German and former PVH manager ( Calvin Klein ) Iris Epple-Righi was appointed in April 2016 . In March 2016 it was announced that Megha Mittal would invest further capital in the company. In March 2016 Escada had 180 stores of its own worldwide, 16 of them in Germany. In mid-2017, Escada hired the British and former fashion designer at Hunter Boots and Burberry , Niall Sloan, as creative director. In 2017, the German market accounted for 10% of Escada’s sales. At the beginning of 2019, Escada signed Rita Ora as a testimonial . In autumn 2019, a red fashion collection was launched by Ora for Escada. In September 2019, British Emma Cook was confirmed as Escada’s new creative director.

New owners from 2019

Megha Mittal sold Escada after constant losses (2016: 7.8 million euros; 2017: 16.5 million euros) at the end of 2019 to the US subsidiary Regent, LP , based in Beverly Hills . A purchase price was not mentioned. The portfolio of the Californian financial investor headed by attorney Michael Reinstein includes Brands4Friends , Mavic and the Sassoon hairdressing salons. Iris Epple-Righi (CEO) left Escada in January 2020. Torsten Dühring (CFO), with the company since the end of 2017, switched to Polo in March 2020 . Both board positions at Escada have not been filled.

Collections

current collections

  • Escada (formerly: Escada by Margaretha Ley ) - main collection with high-priced women's fashion and accessories, since 1978.
  • Escada Sport - a little cheaper, sporty second line for women with clothing and accessories, since 1994.
  • Escada Home - Bed and table linen and terry towels from Escada under license, since 2010.
  • Escada Fragrance - women's perfumes, since 1990. Originally produced by Escada Beauté's own perfume division , which was sold to Wella in 2002 ; from 2003 under license from Procter & Gamble ; since 2016 Coty Inc.
  • Escada Eyewear - eyewear collection under license from De Rigo SpA, since 1998.
  • Escada Watches & Jewelry - wristwatches, jewelry and writing implements from Escada under license from Swiss Fashion Time from Möhlin (International Luxury Group), since 2012.

former collections

  • Escada White Label - side line of the main collection with casual women's fashion in the upper price segment, since 2012.
  • Escada Elements - former business fashion line for women, until 1999.
  • Escada Couture - luxury line for women with low-volume evening wear in the top price segment, from 2002 also with bridal wear, since the 1980s

Criticism for using fur

Escada has faced public criticism for its use of fur; In October 2007, for example, a campaign against Escada was launched as part of the “Offensive against the fur industry”. In October 2010, Escada announced that it would stop trading in human hair from January 2011. In 2017 they sold fur again.

Web links

Individual evidence

  1. ↑ a b c spiegel.de: Died: Margaretha Ley
  2. ↑ Annual financial statements of Escada SE 2015 in the Federal Gazette ; these are the non-consolidated financial statements of the parent company; According to estimates, group sales amount to around EUR 250 million (see de.statista.com: Statista: Sales Escada Worldwide ), accessed on August 24, 2018
  3. ↑ Escada - The decline of a German luxury label welt.de, August 4, 2019
  4. ↑ a b Die Zeit: The German star company Escada has got into a crisis. Now it is slimming down. January 15, 1993.
  5. ↑ Textile Industry: # 93; = 697554 Escada is getting faster, more creative, more sensual. ( Memento of the original from November 26, 2013 in the web archive archive.today ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. December 4, 2008. @1@ 2Template: Webachiv / IABot / www.textilwirtschaft.de
  6. ↑ Luxury brand: The end of patience: Megha Mittal wants to sell Escada. Retrieved September 28, 2019 .
  7. ↑ Sebastian Späth: Decline of the fashion brand Escada: female, nouveau riche - and from yesterday . In: Spiegel Online . September 22, 2019 ( spiegel.de [accessed September 28, 2019]).
  8. ↑ Now it's official: Regent buys Escada. Retrieved November 9, 2019 .
  9. ↑ Escada: Fashion manufacturer sells to financial investor Regent. Retrieved November 9, 2019 .
  10. ↑ fashionunited.fr: Escada: nouveau sac inspiré du flacon de parfum conçu par Margaretha Ley
  11. ↑ beverlyhillsmagazine.com: Escada Summer Solstice 2018
  12. ↑ sueddeutsche.de: Help comes from London
  13. ↑ a b c A group is sagging. manager magazin 1/2008 of December 21, 2007, p. 62.
  14. ↑ The mirror: slimmer and simpler. January 18, 1993.
  15. ↑ n-tv: Escada needs money. March 11, 2005.
  16. ↑ Die Welt : Rich Russians on a shopping spree in Germany , from April 19, 2008, loaded on September 8, 2017
  17. ↑ Bruno Sälzer , in: Internationales Biographisches Archiv 22/2010 from June 1, 2010, in the Munzinger archive ( beginning of article freely accessible)
  18. ↑ Die Welt: Sales of Escada on the home stretch. November 1, 2009.
  19. ↑ Escada doesn't sell Primera to Mutares after all.  ( Page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Dead Link / www.textilwirtschaft.de  
  20. ↑ cf. Fashion group Escada has to file for bankruptcy. at welt.de, August 11, 2009.
  21. ↑ börsennews.de: Escada bankruptcy officially: Insolvency proceedings. (Accessed November 3, 2009).
  22. ↑ Escada: Mittal Trust buys German luxury fashion house. Focus Online , November 6, 2009. Retrieved November 6, 2009.
  23. ↑ Escada - The decline of a German luxury label welt.de, August 4, 2019
  24. ↑ The strange silence of the Escada owner , welt.de, January 15, 2015
  25. ↑ Horizon: Escada receives Munich Marketing Prize. October 22, 2012.
  26. ↑ Escada boss Bruno Sälzer leaves the company , welt.de, February 20, 2014
  27. ↑ Escada loses CEO Glenn McMahon ( Memento from July 13, 2015 in the Internet Archive )
  28. ↑ Handelsblatt : A new boss for the German luxury label , April 27, 2016, accessed on September 8, 2017
  29. ↑ Escada: Help comes from London sueddeutsche.de, March 25, 2016
  30. ↑ SZ, Easter 2016, p. 30.
  31. ↑ We need fun now at Escada welt.de, October 5, 2017
  32. ↑ Change and sales rumors: New creative director at Escada. Retrieved September 28, 2019 .
  33. ↑ TAZ: Protesters go to Escada to the fur. November 16, 2008.
  34. ^ Offensive against the fur industry.
  35. ↑ FashionUnited: Escada bows to animal rights activists.  ( Page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. October 18, 2010.@1@ 2Template: Toter Link / www.fashionunited.de  
  36. ↑ Escada does without real fur from 2011. ( Memento from October 4, 2011 in the Internet Archive )
  37. ↑ Broken promise: luxury label Escada sells fur again
  38. ↑ offensive- gegen-die-pelzindustrie.net: Against the fur trade at Escada