Escada, the once high-flying brand synonymous with the big-shouldered Eighties and the Dynasty set, is reportedly struggling under its new owner Regent LP and is in an increasingly bad financial shape. Escada was acquired by Regent LP, a Los Angeles private equity firm last November. Since then, the brand has closed several of its retail stores in North America and laid off or furloughed nearly its entire retail force besides drastically reducing its corporate headcount.
While some of these outcomes are due to the coronavirus pandemic that forced nonessential retail to close for the last several months, things were already looking grim for the retailer in December and January. A multitude of its typical operating bills have been piling up, since the acquisition, like payments to in-store seamstresses, UPS delivery services and electricity bills of stand-alone retail stores.
Before Regent’s takeover too Escada was already struggling financially but its bills were being paid, unlike today. Regent’s round of layoffs at corporate headquarters in Germany have reduced headcount by at least 50 people, but by some accounts it was by as much as 100 people. All corporate roles in the US have been eliminated as well, leaving roughly 150 corporate employees remaining in Germany.
Escada is facing a current loss of at least $100 million. In a Companies House filing in the UK for 2018 last year, Escada made its mandatory annual financial disclosure where it listed a loss of 7 million pounds, or $8.8 million at current exchange. That was just for operations in the UK however, where it has five points of sale, only one of which is a stand-alone store.