German Fashion House Clawed Back From Bankruptcy

Just over two years ago,Escada the German Fashion had filed from Bankruptcy and written off as dead.

But the global brand is decidedly back in business. According to Sälzer, turnover for the 2011 business year was some 300 million euros -- up 7% over 2010. In the upscale Berlin department store KaDeWe, Escada now boasts the largest shop-in-shop surface area. “Both the industry and consumers have regained trust in the brand,” says Sälzer.

Mid-term, the Escada CEO sees an increase in turnover of up to 500 million euros. That’s still far less than the company earned during its boom years. It’s also short of what Escada needs to actually turn a profit, which is something the company hasn’t managed to do for quite a while.

Years of mismanagement, frequent changes at the helm, and some fashion faux pas had brought Escada to the edge of ruin. Sälzer, 54, who was brought in during in 2009 to clean up the mess after a successful run as the top executive at Hugo Boss AG, got the collections back on track, but couldn't manage to straighten out the finances in time. After attempts at re-scheduling debt failed, he was forced to declare bankruptcy.

Just five days into bankruptcy proceedings, trustee Christian Gerloff sold the operational business to an investment company owned by the family of Indian steel magnate Lakshmi Mittal.

Since then, Megha Mittal, the 34-year-old daughter-in-law of the patriarch and a former Goldman Sachs investment banker, has been chairwoman of Escada. "For me it was a dream come true,” says Mittal, who bought several hundred thousand euros worth of Escada clothing right after the deal went through.

But today Escada seems to enjoy the good fortune and honour to open new sports line and participate in  the catwalk show in the German capital during with Berlin Fashion Week -- the first big fashion event of 2012.