Paris, France — After years of business challenges and an unceremonious break up with creative director Julie de Libran in March, famous left-bank fashion house Sonia Rykiel has been placed into receivership, or the French equivalent of Chapter 11 bankruptcy protection.
On Tuesday, a commercial court granted the brand's request for protection until the end of June 2019 while it searches for a new owner. The news comes after Sonia Rykiel Inc. filed for Chapter 7 bankruptcy in the United States on April 16, and shut down several stores including those in New York and London.
As BoF first reported, Hong Kong investment group First Heritage Brands, which bought a majority stake in Sonia Rykiel in 2012 and acquired it outright in 2017, is looking for new investors to take control of the label, which has undergone several business restructurings and rounds of layoffs since it relaunched in 2014. First Heritage Brands has contracted Rothschild to handle the transaction.
Over the past seven years, First Heritage Brands has invested €200 million into reviving Rykiel, according to a source with firsthand knowledge of the figures. This included €10 million spent on festivities marking the house’s 50th anniversary in 2018, which took place two years after the passing of the legendary designer, best known internationally for her stripey knits.
But these efforts, paired with increased cost cutting, were not enough to course correct. Sonia Rykiel generated €35 million in sales 2018, down from €84 million in 2011. Last year, the company operated at a loss of €20 million.
De Libran left the brand in March amidst charges that First Heritage Brands has refused to honour her contract.
First Heritage Brands, which is backed by backed by Li and Fung billionaires Victor and William Fung in partnership with French luxury executive Jean-Marc Loubier, also owns Paris-based shoemaker Robert Clergerie and luxury leather goods label Delvaux, both of which it acquired in 2011.