The Strategist

Court closes down Sonia Rykiel brand

07/26/2019 - 09:13

The court decided to liquidate the bankrupt French fashion house Sonia Rykiel. At the peak of success, the company owned 400 boutiques, and its founder was called "the queen of knitwear", reports AFP. In May, Sonia Rykiel was declared bankrupt.

About ten companies have expressed a desire to acquire the fashion house in recent months, AFP writes. The list of possible investors included Balmain's former director Emmanuel Diemoz, as well as lingerie manufacturer Etam. As a result, the deal has not been signed.

"This will result in dismissal of 131 employees," - Thomas Hollande, a lawyer, told AFP. Several employees of the fashion house were "full of tears" after the liquidation was announced. “We are tied to this company, first of all it was a family business,” said an employee in an interview with AFP.

Her colleague stressed that “the new owners did not follow rules of the fashion house.” “They weakened what made the brand distinctive, and sought to be in the luxury industry, although we always designed clothing for mass production. Hence the problem with market positioning,” she told the agency.

Founded in 1968 by fashion designer Sonia Rykiel, the brand became a symbol of the “rebellious spirit” of protesting France, recalls France 24. The company’s founder, whom the press often called the “queen of knitwear,” died in 2016, at the 86th year of her life.

For a long time, the fashion house has been owned by the Hong Kong group First Heritage Brands (formerly known as Fung Brands), led by French entrepreneur Jean-Marc Loubier. The decision to transfer to the fund 80% of the brand’s shares was made by Rykiel herself shortly before her death. By the beginning of the year, the share of this fund, which also owns the Belgian brand of leather products Delvaux and shoe manufacturer Clergerie, has grown to 100%.

At the peak of its success, Sonia Rykiel owned 30 boutiques and employed 400 people, according to AFP. Now the company owns six boutiques and four outlet stores, France 24 notes. Over the past 7 years, shareholders have invested about € 200 million in the brand. In 2018, the company's losses amounted to € 30 million.