Blood on the runway

28 May 2009 By Rachel Sanderson

Christian Lacroix s request for creditor protection underscores what can happen to the luxury sector s overleveraged smaller players in a downturn. It also highlights the pressures on the whole sector. Consolidation is needed but don t expect a rush of deals just yet.

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Christian Lacroix, a 22year old French fashion label, filed for protection from creditors on May 28. The company blamed the financial crisis for the collapse of talks with potential investors. It said the recession had also made a fouryear restructuring of the brand too costly to continue.

Christian Lacroix's owner, U.S. duty free store operator Falic Group, will keep financing operations until a buyer is found, according to Bloomberg.

Falic bought Lacroix in 2005 from LVMH Moet Hennessy Louis Vuitton for an undisclosed sum.

Christian Lacroix has never made a profit.

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