French fashion house Sonia Rykiel is bankrupt. Now that the search for an acquirer has failed, the 1968 fashion brand is left with 30 million euros of loss and declining sales.
30 million euros of loss
The court of Paris has declared fashion brand Sonia Rykiel bankrupt. The company has been in the hands of Hongkong-based investment group First Heritage Brands since 2012. Its 135 employees have been fired. Sonia Rykiel was founded in 1968 and scored very well with a more informal clothing style based on knitwear.
Ever since founder Sonia Rykiel died two years ago, the brand has been struggling with declining sales figures. Losses have been accumulating for a while longer, though. Near the end of 2018, the French fashion house was reportedly already dealing with 30 million euros of loss on a turnover of 35 million, according to Le Monde. The brand has been under debt protection since April, with curators looking for acquirers.
Only offer: 200,000 euros
Although the deadline for an acquisition has been postponed twice by the Parisian commercial court, no deal was made. Only one of the candidates actually made an offer (real estate investors Nicole Lévy and her son Julien Sedbon) but the curators refused it: the mother-and-son duo was only willing to pay 200,000 euros for the company and only intended to keep 39 of the employees. Lévy and Sedbon were hoping to breathe new life into Sonia Rykiel online through a blockchain system.
Now the label will be liquidated after all. Talks will soon follow between the representatives of the employees and the owners, the wealthy Fung family from Hongkong. The unions still have hope for a severance payment for the employees. Head designer Julie de Libran already left the sinking ship back in March. In April, the brand's flagship stores in New York and London were closed.