Escada agrees to sells Primera unit at a loss
FRANKFURT, May 22 (Reuters) - Stricken German luxury fashion house Escada (ESCG.DE) has agreed to sell its Primera unit with a hefty write-down, pushing its first-half earnings deeper into the red, it said late on Friday 22 May.
Escada Spring-Summer 2009
Escada said it would sign the deal to sell Primera with brands like Apriori, BiBA, Cavita and Laurel in the next few days and would announce further details then. It did not disclose who it sold the unit to.
But the expected sales price necessitated a write-down and as a result the balance sheet loss already recognized in its 2007/08 results now exceeds over half of the company's capital stock, Escada said in a statement.
Due to the write-down on Primera, Escada's first-half net loss widened to 91.7 million euros ($126.4 million) from a loss of 8 million euros in the first half of its fiscal year 2007/08, Escada said and called an extraordinary shareholder meeting for which it will announce a date in due course.
Escada, which has been struggling with slowing sales, has warned it could face insolvency as early as July if its plan to raise capital, replace a 200 million euro bond that matures in 2012, and negotiate credit lines fails.
The plans was still on track, a spokesman for Escada said.
The company is due to report final results for the six months to the end of April on June 25.
(Reporting by Eva Kuehnen; Editing by Richard Chang)