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Thursday, 13 August 2009

Escada Shows Itself Out

While the high fashion market has always been remarkably competitive and volatile, demanding not only creativity, style, and excellent presentation from designers, marketers, and their teams, but depending on a dedicated following as well, German fashion house Escada has seemed immune to the pitfalls of the fashion industry for several years. With a growing network of worldwide boutiques, a fair celebrity adoption on the red carpet that included such big box-office names as Demi Moore, and a successful branding campaign that rendered the label a cult favorite across several demographics, Escada has seemed a staple of haute couture to much of the fashion world. It might be a bit shocking, then, even within the context of the current economic crisis, to discover that the label has recently announced its abject insolvency, a financial problem from which it's not likely to rise.
One of the biggest sob-stories of the year in fashion has been the demise of much-loved firm Cristian Lacroix, complete with a funeral-style final show and plenty of tears from loyal fashionistas, models, and industry insiders. But the ultra-luxury status of the Lacroix house may have left some with the idea that exorbitant fashion is simply on the way out –a trend that might have trickled down a bit to Escada, but certainly shouldn't have obliterated the label altogether. While the company is certainly out of the “effortlessly affordable” price range, its fair degree of accessibility to the general public resulted in a more widespread adoption that might have saved the label from the ice-cold clenches of the collapsing luxury market.
It seems that a combination of this market decline and what amounts to poor management is ultimately responsible for the label's demise. After a series of bad deals and unwise investments, Escada struggled with the onset of the financial crisis to find a solid foothold as demand began to diminish. It apparently found none, however, and when last year's Winter collection was unveiled to less than enthusiastic onlookers, the fate of the brand began to show through its stylish veneer. This month, the company asked its shareholders to give up around fifty percent of their investment in the brand in order to secure a bank loan capable of keeping the company afloat –at least in the short term. While an eighty percent approval rating was required for a successful deal, just under fifty percent of shareholders approved the action, and on Tuesday after the window of opportunity had drawn to a fatal close, threw effectively threw their towel in.
Escada lovers may mourn the brand's collapse, but others still might look forward to impending sales and imagine what new designs and brand ideas might be born out of this fashion market failure's essential lesson: in dire times, management and spot-on collections can mean everything. As the crisis continues, luxury fashion lovers cross their fingers in hopes that their favorite labels won't follow this unfortunate example.

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