Sonia Rykiel: deadline for submission of offers postponed to July 18
today Jul 1, 2019
The Sonia Rykiel brand and its directors have not yet found the right formula. On Monday, the Paris trade court decided to postpone the deadline for bids to acquire the brand, which has been placed into receivership, in order to “give all parties the chance to file”, according to a source close to the matter.
The Parisian ready-to-wear brand has experienced financial difficulties since the disappearance of its iconic designer in 2016 and asked to be placed in receivership in April.
Between six and seven offers to recover the brand including “two serious” ones were to be presented before the Paris trade court on Monday. However, a number of parties, including employee representatives and company councils, asked for the hearing to be postponed, a request which was accepted by the court. The court will make its final decision on the matter on July 25, a source close to the case told AFP.
Should the trade court grant more time than expected, it is because there have been a number of withdrawals over the past two weeks, FashionNetwork.com learned. The Etam group had previously been interested in acquiring Sonia Rykiel but in the end chose not to formulate an offer on July 1, the day of the hearing.
The Judge ruled hoping for an improvement in the remaining offers and also to allow for the possibility of new offers to be made.
In 2018, the brand based in Saint-Germain-des-Prés reported sales of €35 million and a net loss of €30 million. The business currently counts 133 employees of which 14 are situated in the brand’s workshop, at the heart of its production.
The Sonia Rykiel brand has a network of shops that has now been reduced to six stores and four outlets that sell off products at a discounted rate. The brand makes just over half of its sales in France.
From a strategic and financial point of view, “two offers for recovery stand out from the lot” even if they are only “partial” offers and would only keep on around 50 employees, according to sources close to the matter.
One of these offers is led by Emmanuel Diemoz, the former director of Balmain, “who is already in the business of fashion”, and the other is from a “large Parisian family” who is unknown in the industry, AFP learnt last week.
In 2012, Sonia Rykiel, one of the last remaining independent fashion houses in France, decided to sell off an 80 percent share of its capital to Chinese investment fund Fung Brands, which has now become First Heritage Brands. The business is a holding company of the Fung family in Hong Kong and is led by the Frenchman Jean-Marc Loubier.
The business, which also owns the Belgian luxury leather goods brand Delvaux and the footwear brand Clergerie, acquired a 100 percent stake in Sonia Rykiel in early 2016. In the past seven years, around €200 million has been invested in the brand by its shareholders.
If the court decides to dismiss judicial liquidation and gives buyers a chance to acquire the brand, the challenge for its new owners will be to reach a younger audience and to progress in the Asian market. The new owners would also have to to bring the “style” of the brand, founded in 1968, which comprises a mix of colourful stripes, tight sweaters, and an audacious freedom, up to date from a creative point of view.
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