Jun 22, 2009
Escada pins hopes on restructuring deal
Jun 22, 2009
FRANKFURT, June 22 (Reuters) - Stricken fashion house Escada (ESCG.DE) said it still saw a chance that it could raise cash and reduce debt sufficiently in the next two months to avert an insolvency.
Escada Spring-Summer 2009
"The Board of Management still reckons that the assumptions on which the current business performance plan is based will materialise and that the planned financial restructuring can be implemented," the company said in a report on Monday 22 June.
The company's shares were down 5.17 percent at 2.75 euros at 0738 GMT. The stock has lost around 80 percent of its value over the past 12 months.
Escada, whose luxury gowns are worn by Hollywood stars such as Katie Holmes, has been struggling with falling sales in the recession and previously warned it risked going bust as soon as next month.
At the end of April, Escada's net debt was at 187.6 million euros ($260.7 million), compared with 177.1 million at the end of October, the company's six-month financial report showed.
At the same time, Escada's cash and cash equivalents had declined to 24.7 million euros after the first six months of its fiscal year, compared with 26.6 million euros a year earlier.
"The supply of liquidity, and hence avoidance of the company's and the Group's insolvency is only guaranteed if the initiated measures, above all the financial restructuring, are successfully implemented," Escada said in its statement. ($1=.7197 euros) (Reporting by Maria Sheahan; editing by Mike Nesbit)
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