Munich-base Escada announced disappointing results for its latest quarter and indicated it did not foresee a change in fortunes for the near term.  Through the first three quarters of its fiscal year, sales for Escada-branded merchandise were €290 million, down 14.7% compared to last year. 

CEO Bruno Salzer dismissed expectations for a turn-around any time soon:  "Given the lead times in the fashion industry it will not be until the Fall/Winter season 2009 that a first positive trend will be attainable."

While some press outlets said Escada had dismissed rumors that it was looking to divest its Permira unit, Reuters quoted a source "with direct knowledge" who said the company was "closely examining" a sale.  Permira is comprised of mid-priced labels apriori, BiBA, cavita and Laurèl.  That unit's year-to-date sales are down 13.1% while profit has fallen to just €1.5 million compared to €16.3 million a year ago.

The Apparel Analyst reported that private equity firm Apax Partners was considering a minority investment or outright buyout of Escada.  Two recent capital infusions by the Herz family may have forestalled the necessity of such a move, at least for the time being. 

CEO Salzer clearly recognized the need for dramatic change.  "The nine months figures clearly show the need for action at ESCADA," he said in a statement.

(Posted 25 Sept 2008)